In June 2021, the Bank of England (BoE) published a discussion paper on supervisory stress testing of central counterparties (CCPs). ISDA and the Futures Industry Association (FIA) responded to the consultation.
Overall, the associations agree with the presented approach. The points made in the consultation response include:
- Given the huge effort to run supervisory stress tests (SSTs), the associations propose for global regulators to join forces and run joint SSTs;
- The associations welcome the inclusion of operational scenarios, especially stressing of porting assumptions and propose to also include non-default losses as a result of defaults;
- The associations propose to not only use plausible scenarios, but also include scenarios that probe recovery and resolution situations;
- The associations propose to analyze contagion risk, for instance by linking the losses at CCPs to the available resourced of clearing members;
- The associations propose additional disclosure, including some disclosure specific to each clearing member.
Documents (1) for ISDA and FIA Respond to BoE’s Supervisory Stress Testing of CCPs Consultation
Latest
Updated OTC Derivatives Compliance Calendar
ISDA has updated its global calendar of compliance deadlines and regulatory dates for the over-the-counter (OTC) derivatives space.
Climate Risk Scenario Analysis Phase 4
Climate scenario analysis has become a useful tool for banks and financial institutions to understand the short- and long-term financial risks associated with climate change, particularly in light of evolving regulations and an increased emphasis on reducing the impact of...
ISDA & EMTA Market Practice 45
ISDA & EMTA jointly published the attached updated market practice regarding the determination of barrier events for Brazilian Real non-deliverable continuously monitored barrier option transactions.
Episode 54: A Modernization Agenda
ISDA’s chair Amy Hong sets out priorities for the association in 2026 and the important role that technologies like tokenization and artificial intelligence will play in modernizing derivatives markets. Please view this page via Chrome to access the recording.