Government regulators are pushing hard for the creation of a central counterparty in the credit derivatives market in the wake of the collapse of Lehman Brothers, according to The Financial Times.
Dealers said they are anticipating higher margins on trades in credit derivatives once regulators impose the central counterparty.
“There is a widespread recognition that there needs to be change,” a hedge fund manager told The Financial Times. “Credit derivatives are very valuable tools and we need to find a way to make the market more sustainable in the future.”
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