Over-the-counter derivative trades are increasingly being fed through clearinghouses, reducing the havoc that bespoke, uncollateralised trades can wreak.
It puts the custodian banks and clearinghouses that move money from borrowers to lenders in an unenviable catch-22.
Thus, clearinghouses should demand a lower margin for a futures contract than an economically-equivalent swap.
As politicians push the trading of over-the-counter (OTC) derivatives onto clearinghouses and exchanges, it has a chance to get bigger still.
The reforms seek to put them on a sounder footing by, among other things, forcing more trading through clearinghouses, exchanges and exchange-like "swap execution facilities" (SEFs).But as details of the rules emerge, swaps peddlers and their clients are howling.
This means that the clearinghouses have to absorb a greater share of any loss.
These firms, and perhaps others, have joined America's largest banks and clearinghouses in being designated "systemically important financial institutions" (SIFIs) by the new Financial Stability Oversight Council, a regulatory watchdog.
The critics worry that the CFTC's rule-making will stifle competition among swaps trading platforms and clearinghouses.
Before 1950, illegally operating bookmakers established a national organization of expert observers who transmit their odds through a network of clearinghouses to individual bookmakers.
Clearinghouses were the precursors to contemporary institutions such as clearing banks, automated clearinghouses, and the Bank for International Settlements.
Under public law, credit institutions operate as savings banks, and the state banks act as central banks and clearinghouses for the savings banks and focus on regional financing.
