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What Is the “Default Fund” of a Clearinghouse Used For?

The default fund is a pool of capital from the CCP and its members, used as a second line of defense to cover losses from a member's default.
Greeks.Live23.11.25

What Is the “Default Fund” of a Clearinghouse Used For?

The default fund is a pool of capital contributed by the clearing house itself and its clearing members. Its purpose is to be the second line of defense (after a defaulting member's margin) to cover losses incurred due to a member's failure to meet their obligations.

It is a critical component of the CCP's financial safeguards to maintain market stability.

How Does the “Cover 2” Standard Relate to CCP Default Fund Sizing?
What Happens during a Clearing Member Default Event at a CCP?
What Is a ‘Guarantee Fund’ and How Is It Funded by CCP Members?
What Happens If a Clearinghouse Faces a Major Default by a Member Firm?

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