The collapse of Lehman Brothers a year ago has given the derivatives market a hard shove in the direction of central counterparty clearing. That has opened up great opportunities for CCPs – but also given them some tough challenges, like competing to clear CDS when the investment banks seem to have opted in a herd for one provider. But Kim Taylor, president of CME Clearing House, tells Colin Packham she is confident CME will thrive in the newly competitive world of clearing.
CME Group has committed tointroducing a new US clearing
house for credit default swaps – what’s
the latest on that initiative?
I don’t think anything has materially changed
from what we have said before. We have our regulatory
approvals, we have our systems ready. We are working with
dealers and buy side customers to ensure the readiness of
market participants to use the service.
You told FOW in June that you were in the process of
obtaining regulatory approval for your European CDS clearing
house. Is that still the case and when do you expect that to go
Yes, that is still the case. We are actively working with
the Financial Services Authority to obtain the necessary
approvals. There is a significant regulatory review process and
we cannot predict when that will be complete. In the meantime,
however, we are working hard to ensure we are ready to start
providing services as soon as the regulatory permission is
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