Consultation outcome

Expanded Resolution Regime for Central Counterparties (CCP): consultation

• From: HM Treasury
• Published: 24 February 2021
• Last updated: 28 March 2022 — See all updates

This consultation has concluded

Detail of outcome

The government consulted on new powers for the resolution of central counterparties (CCPs) to help protect financial stability. These include enabling the Bank of England (as the UK’s resolution authority) to take full control of a failing CCP when necessary and to use a number of tools without reliance on a CCP’s rulebook. This would allow the Bank of England to take faster and more extensive action to stabilise a failing CCP than it can now. These powers would also limit risks to public funds by ensuring CCPs and clearing members ultimately bear the losses arising from a CCP failure, rather than taxpayers, whilst still stabilising the CCP, preventing contagion and providing reassurance to the market.

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Original consultation

Summary

An expanded CCP resolution regime would give the Bank of England additional powers to mitigate the risk and impact of a CCP failure and the subsequent risks to financial stability and public funds.

This consultation ran from
24 February 2021 to 11:59pm on 28 May 2021

Consultation description

These new powers would help to better protect financial stability by enabling the Bank to take full control of a CCP when necessary and use a number of tools without reliance on the CCP’s rulebook. This would mean the Bank could take faster and more extensive action to stabilise the CCP than it can now. These powers would also limit risks to public funds by ensuring CCPs and clearing members ultimately bear the losses arising from a CCP failure, rather than taxpayers, whilst still stabilising the CCP, preventing contagion and providing reassurance to the market.

Documents

Expanded Resolution Regime: Central Counterparties

PDF, 327 KB, 32 pages

Expanded Resolution Regime Central Counterparties Government Response to Consultation

PDF, 195 KB, 22 pages

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Published 24 February 2021
Last updated 28 March 2022 + show all updates

1. 28 March 2022

   Adding response to consultation.

2. 24 February 2021

   First published.