Let me briefly touch on the further development of financial market infrastructures for OTC derivatives, focusing on the role of central clearing counterparties (CCPs) and trade repositories. The rationale for fostering the use of CCPs is that a CCP reduces systemic risk by acting as counterparty to every trade, applying multilateral netting, and particularly stringent risk management practices.
In this way, potential contagion risks in the case of a default of a CCP clearing member are minimised both for the CCP itself and for the financial system more broadly. On the other hand, trade repositories play a critical role in providing centralised data record services for OTC derivatives transactions regardless of their degree of standardisation.