Standardised stress testing of clearing houses – while attractive in principle – may drive risk management standards to the lowest common denominator and make the financial system riskier, clearing houses warn.
"Standardised stress testing is desirable, but the issue is the detail as to how this is done," said David Weisbrod, chief executive of LCH.Clearnet's US business, who was speaking at a conference yesterday.
Crafting a standard stress test that can be applied across jurisdictions and mult
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