What is the outlook for the regulation of the credit default swap market?
In late December 2008, the SEC and the Commodity Futures Trading Commission announced the licensing of clearing houses for credit default swaps. The establishment of these central clearing parties is intended to provide greater transparency to the market, improve information available to market participants and regulators, and reduce counterparty risk. While many would view this as a positive development, these actions alone are not likely to preempt future congressional debate on credit default regulation. In Europe, debate continues over the requirement of central clearing for credit default swaps.
