Clearinghouses Saddled with ‘Too-Big-to-Fail’ Tag
By Philip Stafford
February 16, 2017, Financial Times
Clearinghouses, the market utilities that manage the risk of billions of dollars worth of securities and derivative deals on a daily basis, are posing regulators a new headache.
The institutions have been at the forefront of efforts to reform the financial system since the crisis of 2007-2008. Centralizing the trading of derivatives into clearinghouses has reduced risks to the financial system from the failure of an individual bank, but magnified the importance of clearinghouses.