Earlier this week came news Craig Donohue, CME Group Inc ‘s chief executive officer since 2004, will step down at year end. Now we hear that CFTC Vacates CME Clearing Europe Limited Registration as a Derivatives Clearing Organization. At CME’s request, they will no longer clear european derivitives and all this just before the Credit Default Swaps are due to be settled on 19th March. It’s all getting interesting now. 😉

A committee of credit-default swaps traders will expedite an auction to settle about $3 billion of contracts tied to Greece after the nation took steps to force investors to participate in the biggest sovereign-debt restructuring in history.

Traders will hold the auction March 19 to “maximize” the number of bonds that can be used to set payout amounts, the New York-based International Swaps and Derivatives Association said on the committee’s website yesterday. Auctions, which set a recovery value on the underlying bonds, typically are held about a month after credit events are triggered.

The viability of credit swaps as a hedge for about $257 billion of government debt was questioned after ISDA rejected a request on March 1 to declare whether the swaps were triggered because the restructuring effectively subordinated private investors to the European Central Bank. Banks, hedge funds and institutional investors use swaps to protect against losses or to speculate on creditworthiness.


source: NewsDaily , CTFC , Bloomberg