On 19 February 2009, the European Commission published a press release stating that the International Swaps and Derivatives Association and the European Banking Federation have committed to the use of central counterparty clearing (CCP) for credit default swaps (CDS) in the European Union.
The associations, which have signed letters to Commissioner McCreevy, are confirming their engagement to use EU-based central clearing for eligible EU contracts by the end of July 2009. The associations will work closely with infrastructure providers, regulators and European authorities including the European Central Bank in resolving outstanding technical, regulatory, legal and practical issues. These efforts mirror the engagement the industry has made in other jurisdictions in the interests of a globally cohesive regulatory framework.
Commissioner McCreevy stated:
"I welcome today's commitment from the industry to agree to the central clearing in Europe for certain CDS which are systemically relevant. This meets the requests I made to the industry last October. I also take note of their commitment to engage immediately in a dialogue to resolve all outstanding technical issues. Central clearing of CDS is particularly urgent to restore market confidence. Given the size of derivatives markets I am looking at whether other measures might be necessary to make sure they are adequately supervised and do not pose unnecessary risks to financial markets."