Document Type
Article
Publication Title
University of Chicago Law Review
Publication Date
3-2025
ISSN
0041-9494
Page Number
545
Keywords
monetary system, risk free debt, Treasury market trading
Disciplines
Banking and Finance Law | Commercial Law
Abstract
This Essay considers this regulatory response. It focuses on the introduction of mandatory central clearing for most trades in U.S. Treasuries-a proposal seeking to significantly reshape the day-to-day functioning of the Treasury market.10 Central clearing is a well-established means by which to reduce the risk of loss associated when trading parties default. It does so by providing a well-resourced and informed central counterparty (CCP) to step into and stand behind trades. CCPs help promote stability by reducing the probability of, and potential losses associated with, the default of a trading counterparty. But they also impose certain costs on market participants and heighten market reliance on a small number of highly systemic institutions." We analyze this mandate, detailing its likely advantages as well as its potential trade-offs from a public policy perspective.
Recommended Citation
Yesha Yadav,
Central Clearing the U.S. Treasury Market, 92 University of Chicago Law Review. 545
(2025)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1691