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Bank of Canada Governor Mark Carney leaves the BoC’s headquarters in Ottawa in this file photo.
Bank of Canada Governor Mark Carney leaves the BoC’s headquarters in Ottawa in this file photo.
(Sean Kilpatrick for The Globe and Mail)

Canadian banks permitted to clear derivatives outside country

A much-anticipated ruling from Canadian authorities, led by the Bank of Canada, allows Canada’s banks to clear their derivative trades in other countries, rather than requiring them to build their own costly clearing system at home.

In the wake of the financial crisis, which fed concerns that a complex network of trillions in derivative contracts could have brought down the global financial system in 2008, the Group of 20 countries pledged to make contracts such as credit default swaps more transparent and robust.