MF Global’s Collapse Ripples Through Futures Exchanges
November 1st, 2011Via: Reuters:
The fallout from the collapse of MF Global Holdings Ltd rippled through global exchanges on Tuesday, as operators moved to suspend the U.S. futures broker or limit trades of its customers.
MF Global filed for bankruptcy protection on Monday following bad bets on euro zone debt.
London clearing house LCH.Clearnet declared it a defaulter.
MF Global became the most high-profile victim so far of the euro zone debt crisis, and revived memories of the collapse of Lehman Brothers in 2008 that triggered turmoil in global financial markets.
But market participants said because MF Global, although highly leveraged, was far smaller — its balance sheet, at $41 billion, was less than a 10th the size of Lehman’s — the wider impact of its fall would be contained.
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In Australia, trading in grain futures and options was suspended by bourse operator ASX Ltd on Tuesday, prompting concerns about the integrity of the country’s agricultural futures market.
“We’re sitting out here with risk that we can’t cover,” said Jonathan Barratt, head of Sydney-based Commodity Broking Services.
The London Metal Exchange said in a statement on Tuesday it had suspended MF Global from trading with immediate effect, following a similar move by the CME Group , which operates the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange.
