{"id":47720,"date":"2017-10-16T07:21:03","date_gmt":"2017-10-16T07:21:03","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=47720"},"modified":"2017-10-16T07:21:03","modified_gmt":"2017-10-16T07:21:03","slug":"gary-cohn-warns-on-major-risk-evolving-in-clearing-houses","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/gary-cohn-warns-on-major-risk-evolving-in-clearing-houses.html","title":{"rendered":"Gary Cohn warns on ‘major risk’ evolving in clearing houses"},"content":{"rendered":"

Gary Cohn warns on ‘major risk’ evolving in clearing houses<\/span><\/strong><\/span><\/h2>\n

Gary Cohn warns on ‘major risk’ evolving in <\/span>clearing houses: National Economic Council director Gary Cohn said on Sunday he sees a \u201cmajor risk\u201d evolving in <\/span>clearing houses, according to a Bloomberg report.<\/span><\/p>\n

As \u201cwe get less transparency, we get less liquid assets in the clearinghouse, it does start to resonate to me to be a new systemic problem in the system,\u201d Cohn said, speaking at a banking conference in Washington, according to Bloomberg.<\/span><\/p>\n

Looking at future financial risks, \u201cthis is where we should spend some time,\u201d Cohn said. Cohn could not immediately be reached for comment.<\/span><\/p>\n

Clearing agencies act as <\/span>a middlemen between parties to securities transactions by ensuring the smooth transfer of funds and securities, and in some cases, serve as a backstop in case a brokerage defaults.<\/span><\/p>\n

\u201cLike every great modern invention, it has its limits, and I think we have expanded the limits of clearing probably farther beyond their useful existence,\u201d the report quoted him as saying.<\/span><\/p>\n

Cohn\u2019s remarks follow a Treasury Department report earlier this month that called for greater regulation of <\/span>clearing houses, given the centralization of risk in a clearinghouse and resulting implications for systemic risk.<\/span><\/p>\n

As the Trump administration decides whether to reappoint or replace Federal Reserve chair Janet Yellen, whose term expires in early February, Cohn has been cited as a potential candidate.<\/span><\/p>\n

Last year, the U.S. Securities and Exchange Commission said it would adopt rules to strengthen the regulatory framework for clearing agencies deemed systematically important or that are involved in complex transactions, such as security-based swaps.<\/span><\/p>\n

Source:http:\/\/www.reuters.com\/article\/us-usa-clearinghouses-cohn\/gary-cohn-warns-on-major-risk-evolving-in-clearing-houses-bloomberg-idUSKBN1CK0VX<\/span><\/p>\n

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