general terms because it very much depends on each ccp. they have different business models, face different risks and evolve in different environments. so i personally wish we could move gradually to an approach that is closer to the one we have in banking supervision, if we use stress testing to inform supervisory requirements. i would be very much in favour of the concept of a “ pillar ii ” for ccps. we would have pillar i requirements that would be standardised across ccps, and we would have a pillar ii, which would be decided by the competent supervisor and informed by the outcome of the stress test. to me, that ’ s the way forward. it will take some time to take shape and, in the meantime, we should restrain ourselves from approaches to financial resources of ccps that are too simplistic and standardised. bis central bankers ’ speeches

legal issues in some jurisdictions which require the initial margin to be insolvency remote. that ’ s probably what makes initial margin haircutting the least desirable instrument, but since we are still at an early stage in the discussions, i don ’ t want to exclude it completely. i ’ m just saying that this tool would have to be used as a last resort, in a capped way, and for events that are beyond the “ extreme but plausible ” market conditions that we consider for stress testing. some regulators say that, regardless of the problems with initial margin haircutting, this tool should still be made available to ccps in case they need to gain quick access to liquidity to replenish their default waterfall. do you have sympathy for this argument? i don ’ t want to prejudge the outcome of the discussion. there are a number of shortcomings that we still need to investigate more deeply, especially around the legal issue of bankruptcy remoteness and the kind of uneven playing field that we will create if we have an instrument that has a different legal treatment in different jurisdictions. one major concern for us is to be internationally consistent. so if an instrument happens to create an uneven playing field across jurisdictions, it ’ s probably not the right instrument. stress testing for ccps is also high on the regulatory agenda. the cpmi is conducting some work on this. how is it progressing? the cpmi has already expressed public support for exploring a framework for regulatory stress testing, and this is part of the ccp work plan that was released in september 2015. this work plan is a joint endeavour by different standard - setting committees, including iosco, the fsb, and the basel committee on banking supervision. a framework for consistent and bis central bankers ’ speeches comparable stress testing could serve two key objectives : it could help authorities better understand the macro - prudential risks that could materialise, and it could help them assess the financial resources of individual ccps. on the first aspect, i believe that supervisory stress tests will bring maximal value to the stakeholder community – both the supervisors and the ccps themselves, as well as their clients – if they are designed in a way that accounts for the inter - connectedness and the potential spill - over of risk. it ’ s obvious that risk can spread from one ccp to another, from ccps to the clearing members and then bounce back to the ccps. making sense of these interconnections is a big