From: The Atlantic
This summer’s massive financial regulation bill ended “too big to fail” and bailouts for good, right? While we can certainly hope that such pleasant fantasy is closer to reality than fiction, regulators are becoming increasingly worried that the legislation may have merely transferred some of the catastrophic risk contained in big banks to clearinghouses.
The new regulation bill forced most derivatives to go through clearinghouses, which might render those organizations the new “too big to fail” concerns. The Wall Street Journal devotes a recent op-ed to noting that some regulators have become increasingly concerned about clearinghouses, including Federal Reserve and International Monetary Fund officials. WSJ’s editors warn: