The talk will propose a general framework for empirically assessing a central counterparty’s capacity to cope with severe financial stress. Using public disclosures data for global central counterparties (CCPs), my coauthor and I show how to estimate the probability that a CCP could cover any specified fraction of payment defaults by its members. This framework supplements conventional standards of risk management such as Cover 2 and provides a comparative and comprehensive approach to assessing risk protection across CCPs that is not predicated on a specific number of member defaults. We apply the approach to a wide range of CCPs in different geographical jurisdictions and asset classes and find that there are substantial differences in protection coverage.