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Can a Clearing House Fail, and What Is the Protection Mechanism?

Possible but rare; protected by default funds and mutualized capital.
Greeks.Live23.11.25

Can a Clearing House Fail, and What Is the Protection Mechanism?

While extremely rare, a clearing house failure is possible under catastrophic market conditions. Protection mechanisms include a default fund, mutualized capital contributions from clearing members, and the clearing house's own capital.

These layers of defense are designed to absorb losses before the failure impacts the broader financial system.

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