Paul Tucker, deputy governor of the Bank of England, says effective resolution regimes need to be put in place to help deal with the "mayhem" that would result if a central counterparty went bust.
With OTC heading towards CCPs it is more likely that one or more will go bust.Its good that Tucker has raised this horror story now and hopefully it will be heeded and actioned upon.My view would be to increase margining and collateral quality with intra
day revaluations.Now i know this will create more costs but it will be worth it if it prevents a CCP from going down
CompetitiveNew York City, NY (USA)
© Finextra Research 2015