A former UK central banker has warned of the disastrous consequences to financial markets of a clearing house collapse and urged global regulators not to fail the sector.

Speaking at the FT-Fitch Global Banking Conference in London, Sir Paul Tucker, former deputy governor of the Bank of England, said: “If a [central counterparty] were to fail, it would be an absolute disaster, and I cannot understand for the life of me why policies have not been put in place to address that risk.”