Expanded Resolution Regime for Central Counterparties (CCP): consultation
An expanded CCP resolution regime would give the Bank of England additional powers to mitigate the risk and impact of a CCP failure and the subsequent risks to financial stability and public funds.
These new powers would help to better protect financial stability by enabling the Bank to take full control of a CCP when necessary and use a number of tools without reliance on the CCP’s rulebook. This would mean the Bank could take faster and more extensive action to stabilise the CCP than it can now. These powers would also limit risks to public funds by ensuring CCPs and clearing members ultimately bear the losses arising from a CCP failure, rather than taxpayers, whilst still stabilising the CCP, preventing contagion and providing reassurance to the market.