Government Securities Clearing Corporation

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Group.png Government Securities Clearing CorporationRdf-icon.png
AbbreviationGSCC
SuccessorFixed Income Clearing Corporation
Formation1986

The Government Securities Clearing Corporation (GSCC) deviated from standard procedure just after 9-11.

September 11, 2001

Full article: Rated 4/5 9-11/Financial fraud

The GSCC was "allowed to substitute other securities for the physical securities destroyed during the attack" of September 11, 2001. "In the absence of complete information on deliveries into and out of its account at BoNY on September 11, and as a result of its assumption of settlement fails on the starting legs of blind-brokered RPs, GSCC recorded (after the close of business on September 11) $266 billion in transactions that apparently failed to settle.… Continuing connectivity problems prevented GSCC from giving BoNY delivery instructions after the close of business on September 11 and prevented it from acquiring information on activity in its account at BoNY during the day on September 12. Consequently, GSCC recorded $440 billion in settlement fails as of the close of business on September 12... Additionally, while problems were being documented between the BoNY and GCSS, no other institution had those problems."[1]


References


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