Friday, September 24, 2010

ICE = Too Big To Fail

ICE Says CDS Clearing Growth May Bring Central Bank Support In Crisis

LONDON—A surge in credit-default-swaps clearing may allow global exchange operator IntercontinentalExchange Inc. access to central bank liquidity during financial crisis periods, the company's chief executive said Wednesday. Since the financial crisis, regulators have pushed for more central clearing of CDS contracts, but this has created the risk that clearing houses themselves become systemically important in the financial system. ICE Clear Europe and ICE Trust US have now cleared CDS with a gross notional value of $12 trillion, ICE said earlier Wednesday. Moody's Investors Service Inc. said this week that ICE's CDS clearing platforms are now "a systemically important part of the global financial market."

Posted by devo @ 11:28 PM (1178 views)
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2 thoughts on “ICE = Too Big To Fail

  • $12 trillion (ahem, notional) IS to be sniffed at.

    Fellow bloodhounds, do the necessary.

    IntercontinentalExchange Inc.

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  • On March 4, 2009, ICE announced that ICE US Trust, LLC (ICE Trust), a New York limited liability trust company, received regulatory approval from the Board of Governors of the Federal Reserve System to become a member of the Federal Reserve System and to serve as a clearing house and central counterparty for credit default swap (CDS) transactions. Clearing of North American CDS indexes will be followed by liquid single-name credit default swaps.

    Source: http://en.wikipedia.org/wiki/IntercontinentalExchange

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