IMF Working Papers

Central Counterparties Resolution—An Unresolved Problem

ByManmohan Singh, Dermot Turing

March 20, 2018

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Format: Chicago

Manmohan Singh, and Dermot Turing. "Central Counterparties Resolution—An Unresolved Problem", IMF Working Papers 2018, 065 (2018), accessed 12/11/2025, https://doi.org/10.5089/9781484347300.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Recovery and resolution regimes are being developed for central counterparties (CCPs). We analyse current resolution tools in the context of policy, which is to restore the critical functions of a failed CCP. We conclude that the toolkit is insufficient to avoid the costs of resolution being borne by taxpayers, and propose alternative policy suggestions for addressing the problem of a failed CCP.

Subject: Bank resolution, Bank resolution framework, Banking, Central counterparty clearing house, Crisis resolution, Financial crises, Financial markets

Keywords: Bank resolution, Bank resolution framework, bridge CCP, CCP default, CCP difficulty, CCP failure, CCP market, CCP resolution, CCP resolution and recovery, Central counterparty clearing house, collateral, Crisis resolution, Europe, FSB, Global, ISDA, NCWO, parent company, reserves policy, risk model, transferee CCP, variation margin, VMGH, waterfall resource, WP

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