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Clearing portability under threat as FCM pool shrinks
Failure of big clearing brokers could see clients unable to move to stable competitors
![Dwindling liquidity Image of drought](/sites/default/files/styles/landscape_750_463/public/2017-02/drought-pool.jpg.webp?h=31c3e1f2&itok=mvtVlNzY)
The decline in the number of banks providing clearing to the over-the-counter derivatives markets – and attendant concentration of client margin at the five largest swaps clearing banks – is causing increasing alarm among senior policymakers and regulatory advisers, who question how the market would cope if one of these firms were to default.
“It is a serious, unintended consequence of regulation that this could be a problem in a crisis,” says Darrell Duffie, professor of finance at Stanford
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