Abstract
This chapter explores the European rules on recovery and resolution of central counterparties (CCPs), as set out in Regulation (EU) No. 2021/23 of 16 December 2020 (the Regulation). The Regulation provides a detailed regime to apply to CCPs that fail or threaten to fail. It deals with anticipatory recovery and resolution planning, early intervention measures, and, ultimately, resolution. The resolution regime kicks in if it is determined that resolution is necessary in the public interest, as will more likely than not be the case for most CCPs. The Regulation is, to a large extent, inspired by the European rules on the recovery and resolution of banks and larger investment firms, which, to date, remain largely untested. However, the Regulation takes into account the functions and organizational structures of CCPs, which are fundamentally different from those particular to banks, and it is aligned and complementary to the more general provisions of the European Market Infrastructure Regulation (EMIR).
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