CCPs Criticize EU Collateral Proposal
Clearing houses have opposed the European Parliament’s proposal to accept gold as collateral.
Clearing houses have opposed the European Parliament’s proposal to accept gold as collateral, Risk.net reports. As per the state central counterparties (CCPs) will only accept forms of collateral that meet their risk management standards.
The criticism comes over the wording of the clause, which stated that a CCP will accept highly liquid collateral, such as cash and gold, with minimal credit and market risk to cover its initial and ongoing exposure to its clearing members. The European market infrastructure regulation has asked the European Securities and Markets Authority to define technical standards on the type of assets that can be considered highly liquid.
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