ISDA Launches Principles on CCP Recovery

The International Swaps and Derivatives Association (ISDA) launches the Principles on CCP Recovery. The paper published today identifies the key issues that need to be addressed, and makes several recommendations on how to proceed. These issues can be broken down into two basic themes:

• The adequacy and structure of a CCP’s loss-absorbing resources; and

• Crisis management planning in the form of a clearly defined and transparent recovery and resolution framework (R&R) for CCPs when losses threaten to exceed their loss-absorbing resources.

The Principles comprehend transparent risk management standards, practices and  methodologies; Mandatory, standardised and transparent stress testing; Significant CCP SITG; Clearly defined CCP recovery plans; and Clearing service termination or resolution.

The paper is available here