For Better Or For Worse
Why The Clearinghouse Solution Could Have Its Own Difficulties
Traders Magazine Online News, March 14, 2012
Sometimes the solution to a problem-such as the current dangers inherent in the over-the-counter derivative trade-is as bad as, or worse than, the problem. The use of the clearinghouse, or central clearing counterparty (CCP) has been anointed by lawmakers as the way to prevent a repeat of the disasters that sprung from OTC derivatives trading in 2008.
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