CME Group set to unveil plans for swap clearing house – FT

Oct 18 (BestGrowthStock) – CME Group Inc (CME.O: ), the biggest U.S.
operator of futures exchanges, may announce plans for its
interest rate swaps clearing house on Monday, the Financial
Times said, citing people familiar with the plans.

CME has won the backing of leading U.S. financial
institutions to set up the swap clearing house, the Times said.

Interest rate swaps are a type of derivative financial
instruments, which companies use to hedge risk. Derivatives
have been blamed for contributing to the worst financial crisis
since the Great Depression.

Policymakers are hoping that forcing most of the swaps onto
exchanges and requiring clearinghouses to clear the financial
instruments will give regulators a view on the market and avoid
a repeat of the 2008-09 financial crisis. [ID:nN13249212]

Clearing houses could help mitigate counterparty risks
because in the event of a default by a derivatives dealer, the
losses would be absorbed by all the members of the clearing
house.

Presently, such derivatives are traded privately and are
not routed through an exchange house.

CME could not immediately be reached for comment by Reuters
outside regular U.S. business hours.
(Reporting by Sakthi Prasad in Bangalore; Editing by Anshuman
Daga)

CME Group set to unveil plans for swap clearing house – FT