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Regulators see slow progress on who pays for failed clearing house 

June 11, 2015

Huw Jones, Reuters

Global regulators have yet to agree on who would pay the trillions of dollars that would be needed to bail out any failed clearing house for derivatives, a senior European Commission official said on Friday.

While policymakers don't want taxpayers to rescue clearers, central banks like the Bank of England and European Central Bank have said they would offer backstops to clearing houses in emergencies.

After the 2007-09 financial crisis, new rules were introduced to require far more derivatives trades to pass through a central counterparty (CCP) or third party backed by a default fund.

Some of the world's biggest clearers like LCH.Clearnet and Eurex Clearing are in Europe and handle securities worth trillions of euros.

The European Commission is due to propose a draft EU law later this year on how to deal with failing clearers.

Read more: Reuters

 
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