Financial clearinghouses seem to work pretty well (so far)

There was absolute carnage in various markets following the realization of Brexit, and at times massive asset price changes, sometimes ranging from eight to ten percent, were compressed into minutes or hours.

I recall seeing in my Twitter feed that the dollar-pound rate shift was a fourteen-standard deviation event.  That’s not right, and is rather the sign of a bad model, but the point remains that something extraordinary happened.

So far I haven’t read or heard a single account of clearinghouses operating anything but smoothly, as they pretty much did during the various 2008 crashes.  Obviously this success is with central bank liquidity assistance, but still it would be worth studying further one part of the global financial system which seems to be in very good working order and is underpublicized at that.

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