After Nasdaq, cracks appear in foundation of clearing

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Risk sharing is the foundation of central clearing. If it all goes wrong, and a defaulter can’t pay for its own losses, then everyone else chips in via a prepaid fund.

So, it’s probably no surprise that in the aftermath of last month’s default at Nasdaq Clearing – which left members to mop up losses of €107 million ($122 million) – some firms are wondering whether they really do have to share risk with everyone else. Perhaps a segregated default fund, that excludes certain firms or products

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