FIA Global releases position paper
FIA Global issued a position paper on April 28 setting out recommendations for assessing and managing risks that arise from central counterparty clearing.
“Clearing members are uniquely positioned to assess central counterparty risk and recommend improvements in risk management,” said Walt Lukken, president and CEO of FIA Global. “Our goal is to ensure that the risks of central clearing are both transparent and effectively managed.”
FIA Global's recommendations include:
- Enhancing participants' ability to assess CCP risk through consistent and transparent CCP disclosures.
- Ensuring initial margin requirements are effective, transparent and predictable to all participants, and requiring CCPs to increase margin levels where they are determined to be inadequate.
- Avoiding wind-downs and liquidations by prioritizing the continued operations of CCPs using clearly defined loss allocation tools and effective resolution plans.
- Reducing conflicts of interest, aligning incentives and improving risk management through enhanced CCP governance.
