Financial Times FT.com

Pledge to Fed from 15 banks on derivatives and CDS clearing

By Aline van Duyn in New York

Published: September 9 2009 03:00 | Last updated: September 9 2009 03:00

The largest derivatives dealers have promised the Federal Reserve Bank of New York to clear the majority of interest rate derivatives and credit default swaps through central counterparties by the end of the year.

The desire by the Fed to get the 15 banks to sign up for ambitious clearing targets reflects concerns that some banks could opt to use only centralised clearing for a small number of their trades, even as more types of over-the-counter derivatives are brought into clearing houses.

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