GCSA provides the following:
- A cost-effective and pre-funded form of alternative collateral for initial margin and guaranty fund contributions to central counterparties
- A cost-effective form of “skin-in-the-game” for clearinghouses utilizing a prefunded insurance mechanism
- Alternative liquidity facilities for clearinghouses that can augment or replace credit facilities traditionally provided by banks that may also be clearing members, thus reducing potential wrong-way risk in a crisis
- Additional loss absorption tools for CCP recovery and resolution plans
- Additional loss absorption tools for direct clearing member models at CCPs
GCSA’s collection of collateral, liquidity, and risk-transfer products for CCPs is designed to bolster CPMI-IOSCO’s principles for financial market infrastructure. GCSA’s products were also designed to strengthen financial resources in accordance with DCO Core Principles and requirements under EMIR and ESMA standards.