16Some clearing organizations have one clearing cycle per day. Others have two.
17CCPs accept a reasonably wide spectrum of securities that can serve as performance bond collateral. But CCPs do not know which issues of acceptable performance bond collateral a clearing member may elect to deposit, so the initial “margin call” with the settlement bank is always for cash. Once the settlement bank guarantees that the funds will be forthcoming, the CCP has effectively substituted settlement bank risk for clearing member risk. After the securities are delivered to the CCP, the cash is returned to the clearing member's account at its settlement bank.
18See B. Bernanke, 1990, “Clearing and settlement during the crash,” Review of Financial Studies, Vol. 3, No. 1, pp. 133-151.
19U.S. Department of the Treasury, 2009, “Financial regulatory reform-A new foundation: Rebuilding financial supervision and regulation,” proposal, Washington, DC, June 17, p. 14.