24 February 2018
visit www.ebaday.com

Fed establishes clearing contingency working group

29 November 2002  |  2967 views  |  0 Fed establishes clearing contingency working group

Responding to industry criticisms, the Federal Reserve has established a private-sector working group to recommend steps to mitigate risks in the clearance and settlement of US government securities.

The US regulator says the working group will explore ways that JPMorgan Chase and the Bank of New York, the two major clearing banks operating in this market, could substitute for each other if the services of either were interrupted or terminated. The working group has been asked to prepare a final report before the end of 2003.

Michael Urkowitz, senior adviser to Deloitte Consulting, has agreed to chair the group, which will include senior representatives from the two banks, the Government Securities Clearing Corporation, securities dealers, interdealer brokers, custodian banks, The Bond Market Association, and the Investment Company Institute.

In May, the Board and the SEC issued a White Paper on 'Structural Change in the Settlement of Government Securities'. The document expressed concerns about operational, financial, and structural vulnerabilities associated with the status quo, in which all of the most active market participants are critically dependent on one of two clearing banks for settlement of their trades and financing of their positions. The White Paper requested comment on whether structural change was needed to address the vulnerabilities.

Market feedback suggested the authorities concentrate on mitigating risks within the current structure, at least in the short run. Several suggested formation of an industry group to explore the specific changes required for the two clearing banks to substitute for each other in the event of a breakdown in services.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related company news


Related company information

JPMorgan Chase

Related blogs

Create a blog about this story (membership required)
Visit www.vasco.comVisit http://info.nice.comvisit www.ebaday.com

Top topics

Most viewed Most shared
Ripple makes new connections to emerging marketsRipple makes new connections to emerging m...
11778 views comments | 16 tweets | 10 linkedin
hands typing furiouslySome Interesting Applications Of The Inter...
10321 views 3 | 9 tweets | 1 linkedin
Basel Committee outlines disruptive fintech scenariosBasel Committee outlines disruptive fintec...
8554 views comments | 15 tweets | 26 linkedin
Investment Association sets up fintech accelerator for asset managersInvestment Association sets up fintech acc...
8079 views comments | 19 tweets | 10 linkedin
R3 creates Legal Centre of Excellence for blockchain technolgyR3 creates Legal Centre of Excellence for...
7764 views comments | 10 tweets | 14 linkedin

Featured job

Basic c. EUR 90K OTE c. EUR 180K plus full bene...
Paris (preferred) or London

Find your next job