- BIS Fears Financial Seizure at the Heart of the World’s Clearing System
by Ambrose Evans-Pritchard, https://www.telegraph.co.uk/business/
The pillars of the global financial system are fundamentally unstable and could lead to a frightening chain-reaction in the next crisis, the world’s top watchdog has warned.
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Giant “central counterparties” (CCPs) that clear much of the $540 trillion (£428 trillion) nexus of derivatives are themselves vulnerable to failure in times of extreme stress. This is a worry looming ever larger as rising US interest rates expose the weak links in global debt markets.
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The Bank for International Settlements (BIS) said in its quarterly report that the CCPs could cause “a destabilising feedback loop, amplifying stress.”
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https://socioecohistory.wordpress.com/2018/12/20/bis-fears-financial-seizure-at-the-heart-of-the-worlds-clearing-system/