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Swaps Clearing Faces Tougher Rules to Avert Too-Big-to-Fail

  • Regulators find ‘shortcomings’ in clearinghouse recovery plans
  • Financial Stability Board advances plans for firms’ resolution
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Global regulators proposed tougher standards for clearinghouses at the heart of the $493 trillion derivatives market, taking some of the biggest steps yet to prevent the platforms from becoming too big to fail.

The Financial Stability Board and other securities regulators published guidelines on Tuesday for clearinghouses to bolster their assessments of risks and improve plans for how they’d recover after the default of major bank members. The recommendations came after regulators found some clearinghouses negligent in complying with existing standards.