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A new day is dawning for regulation of interest rate swaps. Fifteen banks have agreed to clear 90% of new credit derivatives by December. Banks will also submit 60% of existing interest rate swaps to a central counter party.

What does this mean? It means that trades will clear through an independent counter party called a clearinghouse. What then is a clearinghouse? A clearinghouse is a central counter party that serves as buyer to every seller and seller to every buyer. Commodity futures trades pass through a clearinghouse.

What kind of numbers are we looking at? The interest rate swaps market is a $403 trillion market.

Continue reading Banks plan to clear 90% of their new swaps with a clearinghouse by December

Banks plan to clear 90% of their new swaps with a clearinghouse by December originally appeared on BloggingStocks on Wed, 09 Sep 2009 14:20:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>403 trillion dollar market403TrillionDollarMarketclearinghouseCMEcredit derivavtivesCreditDerivavtivesinterest rate swapsInterestRateSwapsNASDAQVMEWed, 09 Sep 2009 14:20:00 EST