International Regulatory Groups Analyze "Interconnectedness" Between CCPs And Clearing Members

In a new report on interconnectedness and systemic risk, IOSCO, the Financial Stability Board, the Committee on Payments and Market Infrastructures and the Basel Committee on Banking Supervision (collectively, "international standard-setting bodies") mapped the network of relationships between central counterparties and their clearing members. This report is the second issued by the international standard-setting bodies on central clearing interdependencies. (The first is available here.)

The regulators found, among other things:

• "prefunded financial resources are concentrated at a small number of CCPs" (e.g., the two largest cross-border central counterparties ("CCPs") account for roughly 40% of total prefunded financial resources);