The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Derivatives regulation: Central counterparty clearing goes mainstream

CME takes on upstart ICE; Clearing now open to banks and investors

 

estimated value of CDS market

The CME has signed up the main dealers in the credit derivatives market to its clearing service, adding some heat to the competition to tap into a market estimated to be worth $35 trillion. In doing so, CME is preempting legislation before politicians in Washington DC and Brussels that is expected to allow exchanges to break into a market that has been unregulated and effectively ring-fenced to competition by global investment banks. Central counterparty clearing was once the unglamorous part of the financial markets, often referred to as the plumbing that ran beneath the trading floor. A clearing house stands between two parties of a derivatives trade, guaranteeing the trade if one of the counterparties defaults.

That dull reputation got some polish on December 15 when Barclays Capital, Citigroup, Goldman Sachs, JPMorgan, Deutsche Bank, Morgan Stanley, UBS and Credit Suisse all agreed to begin CME’s service.

Member firms
In addition, Bank of America Merrill Lynch, Nomura and Royal Bank of Scotland became CDS clearing member firms.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree