Clearinghouses Need To Develop Crisis Plans, UK Report Says

Law360, New York (April 29, 2013, 4:02 PM EDT) -- Clearinghouses should develop plans for assigning losses to members in the event the trading hubs fail, a key concern now that a growing amount of derivative trading is done through central counterparties, a Bank of England paper released Monday said.

While most central counterparty institutions already have in place a so-called waterfall of default resources in place that would allow it to cover costs they would incur covering the failure of a clearing member institution, including a stand-alone default fund, most do not have a plan...
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