It is not just about IT. It is about making it less likely that their clearing members will default on their obligations to the clearing house; containing the spillovers from any failure of clearing members; and, above all, ensuring their own financial integrity. They are de facto regulators and supervisors for the markets they clear; and risk managers of their own balance sheet. In protecting themselves, they impose some financial discipline on their clearing members. They do this through financial soundness and operational-capacity requirements for access; initial and variation  BIS central bankers’ speeches  1  margining; and levying contributions to a default fund. And they act as a central market authority for valuing positions and setting minimum margin levels. To deliver those quasi regulatory and supervisory responsibilities, CCPs need to adopt prudent collateral policies; but also to monitor the robustness of their clearing members and risks from the business that they are bringing to the CCP. Amongst other things, that means collecting and analysing information from clearing members on large positions taken by their customers. I am not convinced that that is sufficiently recognised by clearing houses or by standard setters. CCPs are, in truth, system risk managers. They absolutely must think of themselves as that, and organise themselves accordingly. Margining and systemic risk The margining policy of CCPs matters enormously to the stability of the system. CCPs should take care to avoid having margining policies that are unnecessarily procyclical – chasing after events and amplifying market moves.

The Swiss Financial Market Supervisory Authority (FINMA) has called on the banks to disclose the differences between calculations using the model-based and standardised approaches. At international level, the aforementioned Basel Committee reforms will likewise result in higher requirements in terms of bank transparency. Domestically focused banks I would now like to turn to the situation of the domestically focused banks. For these banks, developments on the Swiss mortgage and residential real estate markets still represent the greatest source of risk. Over the last six months, momentum on these markets has again eased slightly overall. Growth in mortgage volumes and prices for owner-occupied residential real  BIS central bankers’ speeches  1  estate has been roughly in line with fundamentals. As a result, imbalances on the Swiss mortgage and real estate markets for owner-occupied residential property have remained unchanged since the last news conference. From a financial stability perspective, this is a welcome development. The measures taken to date to contain the risks on the Swiss mortgage and real estate markets appear to be having an effect. The countercyclical capital buffer, for instance, has contributed not only to strengthening the resilience of the Swiss banking sector, but also – together with the other measures taken, such as the revision of the self-regulation rules – to reducing momentum. However, it is still too early to sound the all-clear. For one thing, interest rates continue to be exceptionally low. For another, the residential investment property market, in contrast to the owner-occupied segment, shows no sign of cooling.