The defaults of Lehman Brothers’ entities prompted HKEx to enhance the robustness of its risk management measures and to bring them into line with international standards, said HKEx Chief Executive Charles Li.
HKEx has reviewed its clearing houses’ risk management with particular focus on stress testing assumptions and whether there are sufficient financial resources to support the long-term growth of its securities and derivatives markets. It has published a consultation paper seeking views on reforming the risk management framework.
The review was conducted with reference to the main international standards setting bodies, the Technical Committee of the International Organisation of Securities Commissions and the Committee on Payment & Settlement Systems.
“We placed great emphasis in ensuring our proposals are fair, sustainable and meet or exceed international standards. We have also taken into consideration the characteristics and historical volatility of our markets,” Mr Li said.
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