The question of who will regulate CDSs remains unanswered, but the Federal Reserve Bank of New York (FRBNY), the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have agreed that CDS trades could be cleared by one or more central counterparties very soon.
The credit market meltdown stoked efforts to form central clearing facilities and trading platforms for credit default swaps (CDS). CME Group, the Intercontinental Exchange (ICE), NYSE Euronext and Eurex all have proposals in the works. On Oct. 7, CME Group and Citadel announced plans to launch a trading platform fully integrated with a central counterparty clearing facility for CDSs . Its proposal will use CME Group's clearinghouse to clear the trades. Shortly after the announcement, Citadel gave up its place on the board of the Electronic Liquidity Exchange (ELX), but maintains its ownership stake.
When exchange clearing members come under stress, the clearinghouse gets active, so we talked to Kim Taylor, managing director and president of CME Clearing House Division, to see what steps were taken once Lehman Brothers Holdings declared bankruptcy on Sept. 15.
The title, like the eponymous U.S. television game show, sums up a conundrum. With its stock plummeting and Nymex members threatening to vote no on the CME Group agreement to buy Nymex , CME Group has initiated a $1.1 billion share buyback program.
At peak hours, India's power deficit is over 14% from an average energy shortfall of 9% during non-peak hours. The use of nuclear power to generate an extra 50,000 MW of electricity is the most viable solution to the problem.