The critical status of clearing houses in the
derivatives market is protected by EU-level regulation. But the
fact that no single solution has been chosen to tackle
potential issues is causing concern.
|What is the most efficient option
to prevent a EU clearing house failure?
Derivatives have been considered – rightly or
wrongly – the poster child for everything that is
wrong with the financial market, and efforts to regulate the
$940 trillion global market have been numerous since 2008.
Central counterparty clearing houses (CCPs) have been
credited with bringing more stability and certainty to trading
certain types of financial products. A growing amount of
standardised over-the-counter derivatives is being pushed
through CCPs as part of a concerted effort to regulate these
instruments after several scandals during the financial crisis
brought to light acute failings as to how they were traded and
managed. The collapse of Lehman Brothers is widely believed