That work led to the “NewBank” proposal.1 Although the proposal was ultimately put aside, NewBank would have been a dormant financial institution that could spring into action in the event of potential disruptions from an exit from this business by either of the clearing banks. Some of today’s panelists were actively involved in that work.
Of course, at that time, the business was roughly evenly split between the two providers. Today’s situation is very different— BNYM now has over 80 percent market share, due mainly to consolidation among end users. The Federal Reserve has been working closely with the Department of the Treasury to ensure a smooth transition as JPMC prepares to exit.