US Congress looks at CDS, clearing

17 Jul 2008

The US Congress this week turned its focus toward the credit default swap market with suggestions that it is in need of additional regulation and perhaps a clearing component for the $62tr OTC market.

US government agencies, however, differ as to whether the market requires more oversight.

US Federal Reserve chairman Ben Bernanke said that the over the counter CDS market is in need of efficiency improvements. One suggestion being touted is a central clearing house for CDS contracts, a hole that CME Group and other exchanges would like to fill.

CME chief executive Craig Donohue this...

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“At our current funding level, the Commission is under serious strain. We lack the staff and resources necessary to both implement Dodd-Frank and continue to fulfil our pre-Dodd-Frank duties under the Commodity Exchange Act. Without additional funding, the strain will only become worse in July, when much of Dodd-Frank goes into effect.”

The CFTC's Michael Dunn pleads for Congressional support over the regulator's budget.

US Congress looks at CDS, clearing

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