First and foremost, it would be more straightforward for Canadian authorities – including the Bank of Canada – to exercise our responsibilities for overseeing systemically important financial infrastructure if a CCP were located in Canada. We would also be better placed to manage a crisis and provide emergency liquidity support for a Canadian CCP should that be necessary.
While cooperative arrangements for oversight and crisis management of offshore CCPs can be developed, and are currently being discussed at the international level, this work is still in progress. Such arrangements will need to be adequate to enable the Bank to fulfill its responsibilities for overseeing and safeguarding the stability of the Canadian financial system. A domestic CCP could offer other advantages as well.