The week of 13 November started on an unusual note for the majority of the CCPs in Europe – it marked the start of the first ever global CCP fire drill, an event coordinated by the European Securities and markets Authority (ESMA).

The exercise involved more than 30 CCPS simultaneously running a simulation of their default management processes, while simulating the default of a hypothetical common defaulting clearing member, describes ESMA in a press release. Other organisations that worked in cooperation included EU and non-EU authorities, as well as industry associations.  

According to ESMA, running simulations simultaneously across the different CCPS “may help identify potential operational bottlenecks in the procedures, such as the fact that they may solicit non-defaulting clearing members at the same time”. The exercise was also a chance to share default management best practices among CCPs.


For insight into a participant’s experience of the fire drill, watch an interview with Thomas Laux, Eurex Clearing’s former chief risk officer, here.