US and UK authorities test cross-border resolution protocols for clearing houses
Senior financial regulators from the United States and the United Kingdom held a joint tabletop simulation to assess cross-border resolution arrangements for central counterparties. The exercise brought together leaders from five regulatory bodies to evaluate operational protocols and emergency communications, aiming to preserve international financial stability if a major systemically important clearing house were to experience severe distress.
Economics & Markets··Night
Joint simulation of clearing house distress
Senior officials from the US Securities and Exchange Commission, Federal Reserve Board, Federal Deposit Insurance Corporation, Commodity Futures Trading Commission, and the Bank of England met on 3 September 2026 to conduct a joint crisis simulation. The tabletop exercise evaluated institutional procedures for managing hypothetical resolutions of central counterparties, the critical clearing entities that guarantee trades between buyers and sellers in securities and derivatives markets.[1], [2]
Operational coordination and data sharing
Participating authorities reviewed existing bilateral arrangements designed to support market functioning and cross-border cooperation during periods of systemic financial stress. The exercise focused on testing the speed and depth of information sharing between London and Washington, ensuring regulatory actions remain synchronized if a transnational clearing house encounters liquidity shortfalls or capital impairment.[1], [2]
Long-term framework for financial stability
Regulators agreed to maintain regular bilateral dialogues and advance joint technical analyses on clearing house resilience and crisis response. The exercise forms part of a continuous supervisory program conducted regularly since 2017 to address systemic risks associated with the high concentration of global derivatives and securities clearing within a small number of infrastructure providers.[1]
