Publishing a 23-page “discussion paper on central counterparty practices to address non-default losses”, the world’s association of regulatory watchdogs is seeking feedback from the public. Recurringly, those non-default losses are exemplified by cyber attacks.

The discussion paper – available here in its entirety, and summarised in a press release here – is produced by the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements, together with the International Organization of Securities Commissions (IOSCO).

Central counterparty clearinghouses, CCPs, are styled to rigorously manage the risk that a trading member would default on its obligations to other members. Digging into a sizeable (though capped) buffer of money, it will itself stand in for their counterparty losses from the member default. However, other styles of losses, than member defaults, could occur too and it is these that the current paper zooms in on. Cyber attacks appear to be in particular focus.


“This discussion paper seeks to advance industry efforts and foster dialogue on the key concepts and processes used by CCPs. It outlines current practices at various CCPs to address [non-default losses] in business as usual (BAU), recovery and orderly wind-down scenarios,” the authors state.