BIS slams Nasdaq Clearing for risk management failures

Clearing member says it is giving notice to quit bourse, citing concerns over concentration of risk on venue

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The Bank for International Settlements has issued a stern rebuke to Nasdaq, blasting the clearing house for risk management failures that led to a €114 million ($130.1 million) loss for clearing members earlier this year.

In a report published in its latest quarterly review, the watchdog makes unfavourable comparisons to central counterparties’ (CCPs) handling of the default of Lehman Brothers – which, in the case of the bank’s cleared rates portfolio, did not see losses mutualised. BIS

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