MNI BRIEF: SEC's Gensler Considering Treasury Central Clearing

Central clearing of the USD22 trillion Treasury market is one option for reform following last year's dash for cash, SEC Chair Gary Gensler told Senators at a Tuesday hearing.

"We will seek to consider some of the recommendations that external groups, like the Group of Thirty and Inter-Agency Working Group for Treasury Market Surveillance, have offered around potential central clearing for both cash and repo Treasuries," he said. "I would hope we can bring more resilience through central clearing in that market and also bringing the principal trading firms, the high-frequency trading firms into that remit."

New York Fed staff in an analysis found settlement fails would have been lower in March 2020 if Treasury trades had been centrally cleared, and some ex-Fed officials continue to push for central clearing.