by Ben Moshinsky
The two global regulators who oversee the derivatives market are sounding the alarm on the industry responsible for clearing trillions of dollars of in deals, warning that it has a high concentration of risk and a low ability to manage it.
They published a report into the stability of 10 central derivatives counterparties and clearinghouses on Wednesday. The results are slightly terrifying.
Some central counterparties — we don’t know who, they’re not named in the report — have no guidebook to follow if they get into financial trouble. And regulators are worried. If these were banks, they would risk losing their banking licence.