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Big banks want more detail from U.S. clearers on risk controls

Feb 06 2013 Jonathan Spicer, Reuters

U.S. securities clearing-houses should reveal to their members details on how they plan to protect against defaults and how they invest members' margins, large U.S. banks said on Tuesday, among other recommendations. The so-called Payments Risk Committee, a group of banks overseen by the Federal Reserve Bank of New York, made a series of recommendations meant to safeguard the infrastructure of financial markets against costly breakdowns that can sap investors' confidence. The recommendations, which are not legally binding, would improve the ability of banks and other clearing members to "measure, monitor, and assess their exposures to and activities" with clearing-houses, "further supporting a more stable overall financial system," the 48-page report said. The U.S. central bank does not formally back the recommendations, though it supports the committee's work generally, a senior New York Fed official said. Instead, the clearing-houses are urged to take them up voluntarily. Private,

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