ISDA raises concern about clearinghouse contagion risk

ISDA has released a report expressing concern about how the default of a clearing member could affect central counterparties. "A drawback of regulatory [and other methods] that are currently proposed is that they consider exposure to each CCP in isolation, and do not consider cross-CCP risk," according to the report. "They also do not consider that a [clearing member] has simultaneous exposure to all of the CCPs on which it clears and thus that exposures should not be capitalised to each on a standalone basis."

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