Clearinghouse Safety Key To Derivative Reform: Fed Gov.

Law360, New York (November 21, 2013, 11:24 AM EST) -- A top Federal Reserve official said Thursday that efforts to push large portions of the derivatives trading market onto clearinghouses would reduce risks to the financial system, but to be truly effective, the clearinghouses themselves must be hardened against severe shocks.

In a speech before The Clearing House Association LLC, Federal Reserve Gov. Jerome Powell said that moving segments of the over $6 trillion derivatives market into central counterparties would increase transparency and safety in the marketplace. But, at the same time, those clearing parties could...
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