The appreciation of the dollar, of course, implies a depreciation in other countries’ exchange rates; the depreciation will stimulate foreign aggregate demand by raising net exports. Offsetting this will be the effect of the decline in U.S. income on the demand for foreign countries’ exports. The net effect, for countries with floating exchange rates, is likely to be small.
But CCPs also have the potential to create new single points of vulnerability. This calls for the careful design of CCPs, as well as robust regulation and supervision. It will also be important to ensure sufficient access to CCPs to avoid limiting competition. This is of particular concern in countries, like Canada, that are not host to a large global CCP.