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Balancing CCP and Member Contributions with Exposures
As the industry considers the appropriate ‘skin in the game’ for CCPs, the risk incentives created by the CCP’s contribution have largely been ignored
Skin in the game is at the core of a centrally cleared market and the most critical component of a CCP’s ability to manage the default of a clearing member. CME Clearing believes that skin in the game requirements must be developed on principles that incentivize market participants to manage the risks they create.