Clearing portability under threat as FCM pool shrinks

Failure of big clearing brokers could see clients unable to move to stable competitors

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Dwindling pool of clearing providers is giving rise to fears over systemic risk

The decline in the number of banks providing clearing to the over-the-counter derivatives markets – and attendant concentration of client margin at the five largest swaps clearing banks – is causing increasing alarm among senior policymakers and regulatory advisers, who question how the market would cope if one of these firms were to default.

“It is a serious, unintended consequence of regulation that this could be a problem in a crisis,” says Darrell Duffie, professor of finance at Stanford

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