Re: “economic committee also has the ability to raise the liquidation ration…” Speaking on behalf, EC decisions about LR are based on making decisions about analysis of risk, and then changes in that risk in order to maintain a high level of safety, and therefore confidence and trust in IST. As we have been doing in the past, and changes to parameters will be fully telegraphed and explained in advance, unless responding to emergency safety situations. It is our intention everywhere and always to utterly minimise if not entirely eliminate where possible surprise or unexpected changes. A boring protocol is a good protocol. Money and finance is never the place for excitement, and the ECs role as much as possible is to make that so, or at least never to contribute to that. The problem with making a strong commitment not to change any LR params or others is that it binds our hands in ways that detract from our overall goal of delivering safety, and creates a point of possible attack. Our commitment, as a discretionary expert committee, is to evaluate all relevant available information, and to act as good fiduciaries for the benefit of the community. THat means that, as best we can, we try and anticipate possible shocks or disruptions, and build those into the ex ante parameter settings, which if done well means that we will not need to change parameters mid-course. Our goal is indeed to achieve that outcome of not needing to make adjustments to LRs, CR etc, unless conditions require this as a matter of protocol safety. Speaking on behalf of the EC, I hope this helps explain our thinking and also our understanding of our duties on this matter.
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