CME Group, the Chicago-based futures exchange, is on the verge of completing a deal with some large banks to clear credit default swaps (CDS), reported the Financial Times citing people close to the negotiations.
The CME is said to be in talks with Barclays Capital, Citigroup, Goldman Sachs, JP Morgan, Deutsche Bank, Morgan Stanley, UBS and Credit Suisse for over-the-counter (OTC) credit derivatives .
The agreement is expected to be likely to specify December 15 as the launch date for clearing the first trades, meeting a deadline set by the CME. A spokesman at CME said: “We continue to make significant progress with dealer founding members.”
US regulators and lawmakers believe OTC derivatives are responsible for the recent financial turmoil and intend to make them centrally traded and cleared. However, banks are sceptical of exchanges seeking a greater role in OTC markets, reported the newspaper.
