The prospect of legislation which would force banks and dealers in Europe to clear their deals in the huge credit default swap market centrally moved closer on Tuesday, when a top EU regulator asked parliamentarians to support the move.

Charlie McCreevy, EU internal market commissioner, told a parliamentary committee in Strasbourg that both the European Central Bank and European regulators considered that ”clearing of credit default swaps on a central counterparty in the EU is essential for financial stability and oversight”.