“European lawmakers should amend proposed legislation on living wills for banks to include clearing houses, as current laws are too out of date to cope with new requirements, according to the Bank of England.

“Paul Tucker, deputy governor of the BoE, said regulators needed the legal powers to allow them to take over clearing houses that are close to liquidation and prevent their collapse from hitting the rest of the market.

“To guard against systemic risk, the G20 wants more of the $640tn over-the-counter derivatives market processed through clearing houses, making many privately owned risk management services key financial markets infrastructure. A clearing house stands between two parties in a deal, guaranteeing the trade in the event of a default.”

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