Uniform E.U. Stress Test Backed by CCPs and Banks
By Catherine Contiguglia
February 16, 2017, Risk
Market participants are welcoming the addition of standardized scenarios and liquidity risk to European Union clearinghouse stress tests, with the caveat that the results will need to be read carefully.
The move could help advance a long-running debate about how to test central counterparties (CCPs), which has divided clearing houses, their members and regulators. Supporters of standard stress tests see them as a way to benchmark clearinghouse resilience, while critics say CCPs are too div…