CPMI and IOSCO start stress testing review
12 March 2015 Madrid
Image: Shutterstock
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have begun a review of stress testing by central counterparties (CCPs).
In 2012, the CPMI and IOSCO published the Principles for Financial Market Infrastructures, which requires CCPs to carry out stringent stress testing in order to determine the resources needed to manage credit and liquidity risk.
The tests should include a range of scenarios that cover various extreme but plausible market conditions.
CCPs are growing in systemic importance, partly due to the drive for standardised over-the-counter derivatives to be centrally cleared.
The review intends to identify how relevant standards are being implemented, and whether additional guidance may be required. It will include consultation of CCPs, clearing participants and other relevant stakeholders.
In 2012, the CPMI and IOSCO published the Principles for Financial Market Infrastructures, which requires CCPs to carry out stringent stress testing in order to determine the resources needed to manage credit and liquidity risk.
The tests should include a range of scenarios that cover various extreme but plausible market conditions.
CCPs are growing in systemic importance, partly due to the drive for standardised over-the-counter derivatives to be centrally cleared.
The review intends to identify how relevant standards are being implemented, and whether additional guidance may be required. It will include consultation of CCPs, clearing participants and other relevant stakeholders.
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