I am a guest poster on today’s FTAlphaville. The subject: clearing. The post riffs off an article in the FT that notes the importance of price information for clearing to work efficiently. The basic points are that price information is necessary but not sufficient for clearing to work; that clearinghouses are consumers of information, not just producers of it; and that the debate about standardization has focused on what is really a red herring–contractual standardization–and overlooked the difficulties of economic standardization.
Many thanks to Stacy-Marie Ishmael for providing this opportunity.