Clearing call for derivatives

The world’s top 14 derivatives dealers may need extra cash to handle a surge in transaction clearing, especially in choppy markets, the Bank for International Settlements (BIS) said. Clearing is being favoured by regulators because it is backed by a default fund that ensures a trade is completed even if one side goes bust, as with the collapse of Lehman Brothers during the financial crisis. World leaders have agreed that chunks of the $600 trillion (£365 trillion) off-exchange derivatives market must be standardised and cleared by the end of 2012.