69.The Financial Stability Board has determined that central clearing of over-the-counter derivatives reduces global systemic risk. Accordingly, the Central Bank assigns lower risk weights to bank exposures to central counterparties (CCPs) that meet certain standards for qualification, as described below for Qualifying Central Counterparties (QCCPs).

70.Banks must treat exposures to non-qualifying CCPs as they would treat exposures to any other non-qualifying counterparty. If a CCP being treated as a QCCP ceases to qualify as a QCCP, exposures to that former QCCP may continue to be treated as though they were QCCP exposures for a period of three months, unless the Central Bank requires otherwise. After the three-month period, the bank’s exposures to such a CCP must be treated as bilateral counterparty credit exposures.