to cover 99 % of current and potential losses that may arise from their participants defaulting. on top of this, they need to hold additional resources to withstand a range of extreme but plausible stress scenarios. these could include, for instance, the two largest participants in a major cross - border ccp defaulting. to prepare for situations of even more extreme market distress, ccps also need to formulate recovery plans that show how they intend to absorb losses and restore business viability. see cœure, b. ( 2015 ), “ ensuring an adequate loss - absorbing capacity of central counterparties, ” remarks at the federal reserve bank of chicago 2015 symposium on central clearing, chicago, 10 april. 3 see cpmi - iosco ( 2017 ), “ recovery of financial market infrastructures – revised report ”, july. 4 see cpmi - iosco ( 2016 ), “ guidance on cyber resilience for financial market infrastructures ”, june. the eurosystem recently established the euro cyber resilience board ( ecrb ) for pan - european financial infrastructures, which will help raise awareness and provide a platform for discussing issues related to cybersecurity. see cœure, b. ( 2018 ), “ a euro cyber resilience board for pan - european financial infrastructures ”, introductory remarks at the first meeting of the ecrb, frankfurt, 9 march. 5 under the fsb key attributes of effective resolution regimes, fsb members have committed to establish crisis management groups for ccps that are systemically important in more than one jurisdiction. 6 see cpmi - iosco ( 2018 ), “ framework for supervisory stress testing of central counterparties ( ccps ) ”, april. 7 see bcbs, cpmi, fsb and iosco ( 2017 ), “ analysis of central clearing interdependencies ”, 5 july. 8 see also ecb ( 2017 ), opinion of the european central bank on a proposal for a regulation of the european parliament and of the council on a framework for the recovery and resolution of central counterparties and amending regulations ( eu ) no 1095 / 2010, ( eu ) no 648 / 2012, and ( eu ) 2015 / 2365 ( con / 2017 / 38 ), 20 september. 4 / 4 bis central bankers'speeches

##rutinising seriously the wisdom of increased top - down prefunding requirements for ccp resolution. it is doubtful that such requirements would be effective or proportionate, given the very low probability of ccp resolution and the marked differences between ccps ’ risk profiles. what is more, increasing funding requirements could discourage the use of ccps and instead push counterparties towards riskier and more opaque bilateral clearing. and while i would not 1 / 4 bis central bankers'speeches exclude cases where additional financial resources should be available for both recovery and resolution, ring - fencing resources for resolution only may distort the incentives of all stakeholders to support a successful recovery. that said, the resolution authority should have flexibility to determine the optimal choice of available tools, as well as the best point in time for entry into resolution, as long as the “ no creditor worse off ” principle is respected. it is helpful to assess how further guidance could support authorities in assessing potential resolution funding needs for individual ccps, taking into account, for example, the specific risk characteristics of the products they clear, the types of market they serve and the concentration in ccp memberships. i fully support work currently under way in the fsb in this respect. today, i would like to focus on three key areas where more work is needed. first, more international cooperation is needed. authorities responsible for several major cross - border ccps have not yet embarked on resolution planning and no cross - border crisis management arrangements are yet in place. 5 this could be because of barriers to sharing confidential information, including different approaches as to what is considered confidential and what timely. if that is true, then these barriers need to be removed. likewise, authorities may be reticent to engage with others while legislative frameworks are still evolving. assessing the cross - border implications of a ccp resolution takes time and discussions should get under way as soon as possible. cpmi and iosco are conducting some work in this respect. second, authorities need to better understand how a ccp resolution might look like. ccp resolution scenarios cannot be defined in absolute, quantitative terms given the nature of market events causing resolution. there will always be considerable uncertainty around ccp resolution and related funding needs. nevertheless, further steps should be taken to improve the analytical foundation of ccp resolution planning and to better prepare authorities. while the fsb is addressing this issue in its report, i see two steps in particular. first, cpmi and iosco have recently published