BOE Sees Some Concentration Risks in Clearing House Stress Test

The UK’s major clearing houses are resilient under severe market strains, though have some vulnerabilities in highly concentrated positions, according to the Bank of England’s stress test results published Friday.

ICE Clear Europe Ltd., LCH Ltd., and LME Clear Ltd. were examined in the Bank’s third regular stress test of central counterparties, exploring how they would fare in a scenario that included the default of two or more members.