Newsletter September 09: Centralised credit swaps clearing starts in EU

LONDON – The opening weeks of multilateral clearing of credit derivative contracts in Europe, required to start no later than July 31, under a European Commission-imposed deadline, are being viewed with cautious satisfaction by regulators and the industry. Concern in both the US and EU about the potential systemic and operational risks of over-the-counter (OTC) derivatives, particularly credit default swaps – the most common type of credit derivative – has led to a push on both side of the Atlantic for multilateral clearing.