In a severe crisis, we might even be expected to extend emergency lending to a failing CCP or to its participants although this would only be done at our own discretion: an automatic right to central bank liquidity could create serious moral hazard concerns.2 In short, the safety and soundness of CCPs matters for central banks, and it matters a lot.
Internationally, we collaborate closely with other central banks, and many of us sit on committees of various global institutions.6 For example, I’m a member of the Committee on the Global Financial System of the Bank for International Settlements. My participation allows me the opportunity to discuss market functioning from a Canadian perspective, while hearing about developments in other parts of the world.