ISDA has proposed a recovery and resolution plan for central counterparties in over-the-counter derivatives to prevent default. The plan includes the addition of a recovery mechanism. "The residual losses [of a CCP] should be borne not by the taxpayer, nor by the surviving [clearing members] ... but by all clearing participants with mark-to-market gains since the onset of the default," according to ISDA's proposal. Read ISDA's report.
Published in Brief: