Credit hubs act as single point of failure, SEFCON says

By Beth Shah
12 Nov 2014

Some derivatives market participants are weary of using credit hubs as they act as one single point of failure if a transaction were to fail because many parties are involved, according to panellists at the SEFCON V conference in New York on Wednesday. Parties at risk include swap execution facilities, clearing houses, futures commission merchants as well as their clients, the conference heard.

“We’ve not been a big supporter of the credit hubs, at least from the offset, and that might evolve over time. But certainly right now our approach has been that [credit hubs] create a single point of failure,” said John Dabbs, US head of listed derivatives and OTC ...

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