Stuck in the muddle

Regulators in the US and Europe are making efforts to extend central clearing to all asset classes. However, dealers argue that central clearing does not make sense for foreign exchange. By Alastair Marsh

Foreign exchange dealers are bracing themselves for change. Having encouraged banks to clear a chunk of the credit default swap (CDS) market through central counterparties (CCPs), regulators appear determined to extend the concept to other asset classes. In response, the major foreign exchange dealers have already started to prepare the ground for clearing through a variety of initiatives. But some warn against acting too early, pointing out a large part of the foreign exchange market seems to