LCH.Clearnet has issued a paper calling for standardized stress testing of clearing houses (CCPs) globally. LCH says that implementation of standardized stress testing “will help improve transparency around CCP risk management.” According to LCH, “[it] will allow clearing members and regulators to compare different CCPs on a relative basis, to evaluate the strength and resiliency of clearing houses and to assess the extent to which a CCP’s pre-funded resources (default fund contributions and CCP skin in the game) would be consumed under a uniform set of stresses.” Among other elements stress-tested, claims LCH, should be the successful ability of a defaulted member’s cleared position to be auctioned by a clearinghouse without recourse to special assessments on members.