ISDA, IIF and The Clearing House have responded to the CPSS-IOSCO consultation on recovery of financial market infrastructures. They focus on CCPs, defending mutualisation and limited liability for clearing participants with respect to their CCP exposures. To allocate losses related to a participant default where CCP financial safeguards are exhausted, the respondents support cash calls on participants and the haircutting of variation margin gains. In order to more easily cover liquidity shortfalls, the respondents suggest that initial margin should consist of collateral that could be posted to a central bank in exchange for a liquidity facility.  Regarding the re-establishment of a matched book, the respondents express reservations over partial tear-ups and forced allocation of positions, as they would threaten netting. (Source: Response to Consultation on Recovery of Financial Market Infrastructures