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EU: EC targets ‘too big to fail’ clearing houses

By  |  November 28, 2016

Brussels is proposing to give regulators more power to manage crises at clearing houses — for products including stocks, bonds and derivatives — amid fears such institutions are now “too big to fail”.

The European Commission’s plans, unveiled on Monday, would in case of difficulty allow European and national authorities to safely wind down clearing houses, which have become increasingly important for the economy, or alternatively chart a way for their recovery.

Platforms such as the London Stock Exchange Group’s and Deutsche Börse’s Eurex Clearing underpin the financial markets by acting as counterparties to every buyer or seller.

Their role has been expanded since the 2008 financial crisis as regulators have promoted the use of clearing houses for a wider range of securities, including large parts of the derivatives market.

Full Content: Financial Times

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