Wednesday , July 17 2019
Home / Bank of International Settlement / A discussion paper on central counterparty default management auctions

A discussion paper on central counterparty default management auctions

Summary:
CPMI Papers  |  No 185  |  05 June 2019 PDF full text (385kb)  |  30 pages Central counterparties (CCPs) have become increasingly critical components of the financial system in recent years, due in part to the introduction of mandatory clearing for standardised OTC derivatives in some jurisdictions. Consistent with the key responsibility of guaranteeing the fulfilment of transactions to their clearing participants, CCPs play an important role in mitigating contagion in the event of a participant default. A default management auction is one of the tools that a CCP may use to transfer a defaulting

Topics:
International Settlement considers the following as important:

This could be interesting, too:

Reserve Bank Australia writes Reserve Bank of Australia | Media Releases 1970-01-01 00:00:00

Amol Agrawal writes Demographic changes and their macroeconomic ramifications in India

Amol Agrawal writes Ironically, Alan Turing to be the face of GBP 50 banknote (Ramanujan was in shortlist too!)

Amol Agrawal writes How to Keep Central Banks Independent

CPMI Papers  |  No 185  | 
05 June 2019
PDF full text
 (385kb)
 |  30 pages

Central counterparties (CCPs) have become increasingly critical components of the financial system in recent years, due in part to the introduction of mandatory clearing for standardised OTC derivatives in some jurisdictions. Consistent with the key responsibility of guaranteeing the fulfilment of transactions to their clearing participants, CCPs play an important role in mitigating contagion in the event of a participant default. A default management auction is one of the tools that a CCP may use to transfer a defaulting participant's positions to a non-defaulting participant, thereby restoring the CCP to a matched book.

This CPMI and IOSCO discussion paper focuses on five key aspects of a CCP's default management auctions. It aims to facilitate the sharing of existing practices and views on default management auctions, and to foster dialogue on the key concepts, processes and operational aspects used by CCPs in planning and executing effective default management auctions. Additionally, the discussion paper identifies certain considerations that may be useful for CCPs to take into account when planning for auctions.

The discussion paper seeks general and specific comments and suggestions from respondents by 9 August 2019. Comments should be submitted here by Friday 9 August 2019.

Related information

International Settlement
The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

Leave a Reply

Your email address will not be published. Required fields are marked *