In response to the Bank of England’s discussion paper on CCP Resolution Execution and Resolvability Outcomes, the WFE emphasises that CCP recovery should be allowed to run its course where viable. Furthermore, the paper advises building on existing CCP recovery arrangements, as well as preserving sufficient flexibility to respond to the specific circumstances of a resolution event.
The paper also cautions against prescriptive resolution measures that could distort incentives to support recovery, and warns against measures such as forcing CCPs to not have any dependencies on systems or staff provided by a parent group – which would ultimately raise the cost of central clearing.