BoE economists build model to assess CCP backstop
Economists at the Bank of England (BoE) have built a "top-down" statistical model for estimating a central counterparty's (CCP's) exposures to its members, and the risk arising from these exposures.
In Assessing the adequacy of CCPs' default resources, Fergus Cumming and Joseph Noss acknowledge that the failure of a CCP could lead to "widespread disruption in financial markets" and question what size backstop would be "sufficient to mitigate the risk of member default".
CCPs have two main lines
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