Banks around the world should be made to set aside 2% of their capital as protection against the risk of a central clearinghouse's failure, the Basel Committee on Banking Supervision said in a draft proposal issued Monday.
Transactions carried out through supervised counterparties are considered more transparent and provide access to more liquidity than so-called over-the-counter deals.
"The committee's intent is to provide incentives for banks to increase the use of CCPs," Mark White, chairman of the Basel panel's Risk Management and Modeling Group, said in a statement. "This is balanced, however, by the need to ensure that the risk arising from banks' exposures to CCPs is adequately capitalized."
Greater use of central counterparties has been endorsed by the Group of 20 leading economies.