CME Group has issued a white paper outlining its views on how much funding clearinghouses should contribute to their default protections. CME stressed that clearinghouses are market risk neutral and do not engage in trading, lending or other market risk creating activities. The paper noted that CME's contribution to the default protections at its clearinghouses in the U.S. and the U.K. was $525 million at the end of the third quarter, which was equivalent to 5.25% of the total default fund contributions. The paper criticized suggestions that clearinghouses should make larger contributions, saying this would create "negative incentive effects" by subsidizing risks taken by clearing members.
