The CFTC held liquidity stress tests on CME Clearing, ICE Clear U.S., and LCH, Ltd. clearinghouses and here are its findings using positions and collateral as of Aug. 16, 2017:
- All of the clearinghouses demonstrated the ability to generate sufficient liquidity to fulfill settlement obligations on time.
- The clearinghouses generated funds in a number of ways. The range of methods included: (i) using cash received from maturing reverse-repurchase agreements, (ii) selling collateral, (iii) accessing cash balances at a commercial bank, (iv) accessing cash balances at a central bank, (v) converting one currency to another, and (vi) entering into repurchase agreements. The three clearinghouses used different combinations of these methods.
- In instances where multiple DCOs used the same methodology or the same firm to meet liquidity demands, staff concluded that the cumulative size of liquidity requirements in this scenario would not impair the ability of each clearinghouse to meet its settlement obligations.
For more information, go to: http://www.cftc.gov/PressRoom/PressReleases/pr7630-17