In carrying out the G-20 mandate requiring all OTC derivatives to be centrally cleared, it is essential to ensure that we do not unduly concentrate risk in a relatively small number of institutions that are direct clearing members of global CCPs. These were the very institutions that spread and amplified contagion through the global financial system in 2008.
This potential concentration of risk has several dimensions. First, if one of the direct clearing members fails, that poses risks to the CCP and to the other direct clearing members. Second, the failure of one of these large institutions would pose risks to institutions that clear indirectly through it.