Central clearinghouses displace bilateral contracts, becoming the counterparty in all trades.

Evidence

The degree of disentanglement of a futures contract from those who initially entered into it depends on the clearing mechanism in place (Mille, Muniesa, Panourgias, and Scott, forthcoming). Moser (2000) describes the evolution of clearing on the Chicago Board of Trade from “direct clearing” of bilateral contracts, via “ring clearing,” to “complete clearing” in which the clearinghouse itself became the counterparty in all contracts. This last is now the standard situation in derivatives exchanges. — Donald MacKenzie, An Engine, Not a Camera, 1399

Categorization

• XREF: Directly relevant to the modern debate over central counterparty clearing (CCP) post-2008 — a lineage from CBOT ring clearing to today’s derivatives infrastructure the reader can connect to financialization literature.
• SEED: Historical trajectory of clearing mechanisms is a concrete, natural-history-of-finance angle: how a market’s legal architecture evolves to handle anonymous counterparties.