In a Friday morning announcement, the Fed said it would be meeting with four potential CDS clearinghouse operators: Eurex, NYSE Euronext, CME Group/Citadel and IntercontinentalExchange/the Clearing Corp. Also at the meeting will be representatives from the major dealers who sell CDS contracts, buyers of the contracts, and representatives from the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission and the European Central Bank.
Given the central role the market is playing in the epic credit freeze, the issue of a clearinghouse for CDS has gained increasing importance of late. Right now, it's virtually impossible without a central body to regulate the market to gain insight into the unregulated, over-the-counter market for CDS contracts, and players hope that setting up such a central body as quickly as possible could lessen some of the crippling uncertainty that is plaguing the credit market. - Vipal Monga
See the announcement from the Fed
Vipal Monga is a senior writer for The Deal.
Comments
Closing the Gate after the horses have left?
Taxpayers want the questionable processes(gray areas) examined and brought under control.