Lord Myners – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Lord Myners on 2016-03-17.

To ask Her Majesty’s Government whether they will review the possible consequences for financial stability of the consolidation of central clearing houses.

Lord O’Neill of Gatley

European Regulation No 648/2012 (EMIR) establishes a strict supervisory framework for CCPs, which in the UK are regulated by the Bank of England.

EMIR’s requirements – which continue to apply in the event of a merger or change of control of a CCP – include that a CCP must be sufficiently well-resourced to withstand extreme market events, including the simultaneous default of its two largest clearing members.

In the event of a qualifying change of control the Bank of England must under EMIR also assess the suitability of the proposed acquirer and financial soundness of the proposed acquisition.

Copies of the Bank of England’s 2016 report on supervision of financial market infrastructures were laid before Parliament on 4 March and are available in the House library.