Business | General

EU regulators plan central warehouse for credit contracts

European Union regulators are planning to store copies of credit default swap contracts in a central warehouse, as part of efforts to make the market safer, a top market regulator said on Friday.

  • Reuters
  • Published: 23:01 March 1, 2009
  • Gulf News

Brussels: European Union regulators are planning to store copies of credit default swap contracts in a central warehouse, as part of efforts to make the market safer, a top market regulator said on Friday.

Eddy Wymeersch, chairman of the Committee of European Securities Regulators, the pan-EU watchdog group, said the proposal ties in with a commitment by dealers to centrally clear their European contracts in the EU from the end of July.

"We would end up having more insight in that part of the market which we do not have today," said Wymeersch.

The G20 summit in Washington last year agreed there should be central clearing of credit default swap contracts to cut risk in a market that grew in just a decade to $60 trillion (Dh220.4 trillion) in notional outstanding value by the start of last year. The aim is to make markets safer and more transparent.

The DTCC already operates a warehouse in the United States which keeps "golden copies" in digital form of credit default swap contracts.

It was part of industry efforts to compress the outstanding value of the contracts to $27 trillion in the DTCC warehouse by January this year, representing about 90 per cent of the global market.

Wymeersch said work was continuing on defining "characteristics" of a European warehouse. "We will go, after a time, to contract it out to the private sector. We will not do it ourselves as it's not our business," Wymeersch said.

  • Rate this article
  • Average reader rating (0 votes) 0 Stars
Tools

Emailing an article to friend is a simple way to share a news item. Your friend will receive an email with your name and email address as well any personal message you choose to send.

The information you provide on this page will not be used to send unsolicited emails.

This service is not intended to encourage spam, and action may be taken against individuals who maliciously enter personal details of another individual.

Share this article

More from Business General

  1. Record surge in UAE consumer confidence

  2. Australia and UAE explore cooperation

  3. DSF 2010 to kick off on January 28

  4. Forum to explore ways of boosting UAE exports

All articles in General

More from Business

Gulf News
Popular in Business
Way to go this DSF
XPRESS

Way to go this DSF

A fun-filled route to guide you to all the happening dos in town

Business Editor's choice