2  authorities need in order to effectively resolve a CCP, the potential incentives related to using various loss-allocation tools in resolution, the application of the “no creditor worse off” safeguard, and the formation of crisis management groups--a key step in facilitating cross-border regulatory coordination in the event of a failure of a systemically important CCP.
Ensuring the safety of the system also requires an understanding of the interdependencies between CCPs and their clearing members. Work on this is ongoing. Preliminary analysis confirms that there are large interdependencies between banks and CCPs, including common exposures related to financial resources held to cover market and credit risk, as well as common lending and funding arrangements.