Complexity surrounds the prevention of EU CCP failure

Author: Amélie Labbé | Published: 27 Mar 2017

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 to...



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