European Commission warned against central banks backing clearing houses
Patrick Pearson, head of the Financial Markets
Infrastructure Unit at the European Commission’s
Financial Markets Directorate, has said a formal central bank
guarantee of central counterparties (CCP) would be undesirable
from both a political and risk management perspective.
Speaking at the FIA’s international Derivatives
Expo in London, Pearson said on Wednesday that while he was in
favour of "liquidity facilities, lines and currency lines
between central banks," it was "going one step too far to get
public statements from central banks that they will always
stand behind a CCP."
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