ESMA News

ESMA stress test of Central Counterparties finds clearing system resilient


ESMA stress test of Central Counterparties finds clearing system resilient

Tuesday 05 July 2022 08:15

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the results of its fourth stress test exercise of Central Counterparties (CCPs). The results confirm the overall resilience of European Union (EU) CCPs, as well as third-country Tier 2 CCPs, to credit, concentration and operational risks under the tested scenarios and implemented framework. However, the stress test also identified areas where some CCPs may need to strengthen their risk management frameworks, or where further supervisory work should be prioritised, including on concentration and operational risks.

The report’s key findings are:

  • CCPs have sufficient buffers to withstand adverse market developments in combination with the default of the two clearing members with the largest exposures;  
  • Gaps are identified between the necessary and available buffers for

Original Article Here

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