Have regulators created a new type of financial monster?
Clearing houses pose new perils for the global financial system
GRIMSTAD, NORWAY, is an unlikely setting for financial-market shenanigans. But the fishing town is home to Einar Aas, a trader who took huge bets on Scandinavian energy markets. His 15 minutes of infamy came in September 2018, when his bets went spectacularly wrong. Unable to cover his losses, he blew a €114m ($133m) hole in the capital buffers of Nasdaq Clearing, which handled his trades. Other members of the clearing house—mostly banks and energy-trading companies—were called upon to replenish its buffers.
This article appeared in the Finance & economics section of the print edition under the headline “Flight to safety”
Finance & economics June 1st 2019
- Have regulators created a new type of financial monster?
- Will the trade war spell the end of Chinese stock listings in America?
- Jokowi wants to improve the quality of Indonesia’s labour force
- Facebook’s planned new currency may be based on a blockchain
- Bank supervision in America is unfit for the digital age
- China cannot easily weaponise its holdings of American government debt
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