Yesterday, Charlie McCreevy, the European Commissioner for the Internal Market and Services, gave a strongly worded speech to European Parliament members calling for comprehensive regulatory reform, including increased regulation of the credit derivatives market. McCreevy stated that the response of the derivatives industry to the financial markets crisis has been “disappointing,” and that he had hoped that industry participants would voluntarily agree on the necessity of a central counterparty (CCP) based in the EU to clear trades on EU entities. With proposed agreements concerning an EU-based CCP failing, however, McCreevy stated that a regulatory approach is now necessary.

In response, Eraj Shirvani, Chairman of the International Swaps and Derivatives Association (ISDA), released a comment stating that “The CDS industry is dedicated to its very clear and demonstrable commitment to centralized clearing for these products,” and that ISDA “respectfully urge[s] the European Commission to resume its dialogue with the industry.”