Oct. 07, 2022
I have three questions about the following content of this ruling: OCC is proposing to expand its liquidity facilities to include a new arrangement with a bank to provide access to cash for OCC. As described in more detail below, OCC is proposing to execute a master repurchase agreement (‘‘MRA’’) with a bank counterparty as part of OCC’s overall liquidity plan. OCC is not requiring its members or other market participants to provide additional or different collateral to OCC. Rather, the proposed MRA would provide OCC with another vehicle for accessing cash to meet its payment obligations, including in the event that one of its members fails to meet its payment obligations to OCC Questions: 1. Why is OCC not requiring the potentially defaulting member to post more collateral if the member is at risk of defaulting? 2. Why is OCC making arrangements with a bank to meet the payment obligations on behalf of a member, as opposed to forcing the defaulting member to meet their obligations? 3. What bank is agreeing to backstop the OCC and why is its name not public?