EU's Clearinghouse Plan: The New Too-Big-to-Fail

The video discusses recent changes in the European Union's approach to financial regulations, particularly concerning clearing houses. These entities are now recognized as potential systemic threats if a major bank defaults. The EU is finalizing a regulatory framework to address these risks, partly in response to the Brexit vote. The European Central Bank may provide liquidity to struggling clearing houses, suggesting they should be located within the euro area for better access to resources.

What changes has the European Union made regarding clearing houses?

What potential threats do clearing houses pose to the financial system?

How did the financial crisis influence the current risk management strategies involving clearing houses?

What are the implications of a bank defaulting on its obligations to a clearing house?

In what ways is the European Central Bank involved in the regulation of clearing houses?