The Trillion Dollar Question: Can a Central Bank Bail-Out a Central Counterparty (CCP) Clearing House which is 'Too Big To Fail'?

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Abstract

[Extract]
I have previously argued in my Article, Central Counterparties and the
New Transnational Lex Mercatoria, that the new transnational lex
mercatoria is the main source of law governing the operations of central counterparties (CCPs or singularly CCP). It is a legal framework which
recognizes that the customs, practices, and usages of CCPs are a legally
binding source of law.
That is to say, CCPs have operated as self-regulatory organizations
(SROs) and have developed their own operations for risk management and
default procedures by altering and adapting their customs and practices over
the past several decades. Adhering to this framework, courts in various
common law jurisdictions have enforced these customs and practices as
legally binding between participants of the clearing system.
Original languageEnglish
Article number3
Pages (from-to)433-485
JournalBrooklyn Journal of Corporate, Financial and Commercial Law
Volume6
Issue number2
Publication statusPublished - 2012
Externally publishedYes

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