France: Banks face mandatory EU credit derivatives clearing

[Joanne98]

STRASBOURG, France, Feb 3 (Reuters) - Banks must be forced to clear centrally their $30 trillion off-exchange credit derivative trades and cut risk for investors, the European Union's top financial market regulator said on Tuesday.

EU Internal Market Commissioner Charlie McCreevy told members of the European Parliament that attempts to obtain industry backing for central clearing had failed.

"At the last minute they pulled out of an agreement and now a regulatory approach is necessary," McCreevy said in a statement after a meeting with the EU assembly's economic and monetary affairs committee.

McCreevy said he was urging parliament to amend existing EU rules to bring about compulsory clearing.

The EU assembly and member states are reforming the bloc's bank capital requirement rules to apply lessons from the credit crunch.

And the economic affairs committee's chairwoman, Pervenche Beres, is considering a provision to mandate central clearing of credit derivatives traded off an exchange.

The new rules are due to be adopted by April.

http://www.reuters.com/article/governmentFilingsNews/idUSL373516920090203

[Bigmack]

1. Where is OUR McCreevy

when we need him? This horrible derivative business is going to swamp OUR banking system before it's "over." Ms Bigmack

[GliderGuider]

2. I wonder if this is going to be the start of a global mark-to-market event?

If so, the ride is going to get even bumpier in April.

[PM Martin]

3. kick