In All, Eight Institutes Dubbed Systemically Important
July 20, 2012
So far, the Financial Stability Oversight Council voted to designate eight institutions as systemically important financial market utilities (SIFMUs).
The institutions are:
The Clearing House Payments Company, L.L.C., on the basis of its role as operator of the Clearing House Interbank Payments System
CLS Bank International
Chicago Mercantile Exchange, Inc.
The Depository Trust Company
Fixed Income Clearing Corporation
ICE Clear Credit LLC
National Securities Clearing Corporation
The Options Clearing Corporation
The council was empowered to make this designation under Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The status means that the institution’s failure could create risk of significant liquidity or credit problems within the U.S. financial system.
There are four major factors important for assigning this designation:
1. the aggregate monetary value of transactions processed by the FMU;
2. the aggregate exposure of the FMU to its counterparties;
3. the relationship, interdependencies, or other interactions of the FMU with other FMUs or payment, clearing, or settlement activities; and
4. the effect that the failure of or a disruption to the FMU would have on critical markets, financial institutions, or the broader financial system.