The European Parliament and Council have established Regulation (EU) 2021/23, creating a framework for the recovery and resolution of central counterparties (CCPs). This regulation aims to ensure financial stability and prevent adverse economic impacts in the event of CCP failures by requiring robust recovery plans and resolution strategies. It underscores the need for timely coordination among authorities across member states and includes provisions to protect financial markets from disturbances caused by potential CCP defaults.

The regulation mandates CCPs to implement recovery plans addressing both default and non-default scenarios, ensuring that they can continue critical operations without reliance on extraordinary public financial support. It further establishes resolution tools to manage CCP failures effectively, prioritising the continuity of functions and minimising taxpayer exposure, thereby enhancing the resilience of the financial ecosystem in the Union.