Europe moves toward global credit default swap clearinghouse

Are the markets getting closer to an American or European or possibly a trans-Atlantic clearinghouse for credit default swaps? The momentum is headed in that direction, as dealers and investors in Europe have moved a step closer to meeting regulators' demands for greater transparency and reduced risk.

Dealers in Europe have agreed to new conventions that make it easier to offset and cut the number of outstanding contracts in Europe, Bloomberg News reported Monday. The changes will have the effect of increasing transparency and reducing systemic risk in Europe's market.