![]()
- Call Me Crazy: Confessions of a Black Friday Shopper
- US Firms Hit by Payroll Taxes at Exactly the Wrong Time
- Citi Mortgage Reveals Something the US Treasury Won't
- Fed Sanguine About US Recovery, Worried on Jobs
- Amended Berkshire Filing Reveals No 'Secret' Holdings
- In Time for Holidays: More Gloom and Doom on Economy
- Market Pros Reveal Top Black Friday Trades
- Holiday Guide to This Season's Smartphones
- Turkey Day 101: How Well Do You Know Your Bird?
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- 5 Big Bank Stocks Investors Should Consider: Strategists
- Gambling Drunk, Texting to Live And America's On Sale - Your Emails
- Nov. 24: Unusual Volume Leaders
- NBA D-League On The Rise
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- CNBC Anchor Takes a Sabbatical
- Privately Held Facebook Creates Dual-Class Stock
- NBA D-League On The Rise
- On Twitter, Beware False Prophets
- Boeing, Duke Energy Win Smart Grid Stimulus Grants
- Is Genius Contagious?
- Citi Mortgage Reveals What Treasury Won't
- Nov. 24: Unusual Volume Leaders
Officials at the Federal Reserve plan to meet with top executives from two commodities exchanges in an effort to create a new marketplace for credit default swaps, one of the most important, controversial and opaque securities traded on the Wall Street, CNBC has learned.
![]() |
The meeting, scheduled to be held as early as Tuesday of this week at the headquarters of the New York Fed, is expected to clear the way for the creation of a new clearing house, or exchange, where CDSs can be traded with more transparency and with a degree of government oversight.
At the moment CDSs are traded in the over-the-counter market, where traders buy and sell the securities among themselves.
The effort by the Fed is designed to create a centralized market place where CDSs can be traded.
People close to the talks say that the new exchange could be up and running in a matter of weeks.
Credit default swaps are essentially insurance policies against the possibility that a company might default on its debt. The buyer of the CDS pays a premium to the seller for their protection. (Charlie Gasparino breaks the news on CNBC in the accompanying video).
But the securities are controversial; some Wall Street executives say they can be easily manipulated to deflate the value of their stock. CDSs on Bear Stearns and Lehman Brothers [LEHMQ
Loading...
()
] spiked tremendously just before both firms' implosions this year.
Other major firms that have seen their share prices fall and finances distressed. For example Morgan Stanley [MS
Loading...
()
] and Goldman Sachs [GS
Loading...
()
] witnessed a sharp increase in the cost of CDSs.
The two exchanges in the running to create the new CDS exchange are the Intercontinental Exchange [ICE
Loading...
()
], also known as the ICE, and the Chicago Mercantile Exchange, or the CME Group [CME
Loading...
()
].
![]() |
The CME's chief executive Craig Donohue has publicly stated that his exchange is ready to start an exchange for CDSs and was merely waiting for approval from regulators, including its primary regulator the Commodity Futures Trading Commission.
But officials at the ICE, headquartered in Atlanta, are making their own push to be the exchange where CDSs are traded. Officials there plan to incorporate as a bank so they can be regulated by the New York Fed if they are chosen, and headquarter their operations in New York.
- Remember when auto shows were major events where new models could generate buzz?
- CNBC’s Mike Huckman visits a cutting-edge plant to see how the flu vaccine of the future is being made.
- People who bottle up their anger at work are up to five times more likely to suffer a heart attack, a study found.
- Playboy will outsource its publishing operations in a bid to become profitable again.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.














