Is the current turmoil a boon for exchange traded credit derivatives? - Part II

John Dizard (FTfm April 14) seems to have the same opinion as me about the need for clearing houses such as those used by futures exchanges for the unregulated credit default swap (CDS) market. The issue of counterparty risk has been highlighted lately and I think this might trigger some of the CDS trade into exchanges. I wrote about this in my article Back to the Future: Futures Margins in a Future Credit Default Swap Index Futures Market (The Journal of Futures Markets 27 (1), 2007) way back in 2006 and I miss a discussion on this issue. As always, maybe we'll have to wait for the accident to happen before someone responsable takes action.....