CDS clearing drive ignores the facts, argues Tullett's Smith

Interdealer broker Tullett Prebon's chief executive Terry Smith argues in today's Financial Times that the clamour for a central counterparty for credit default swaps shows a blatant disregard for the facts. He says the calls are cultivated by self interest on the part of politicians and some operators.

He attacks the universally accepted proposition that credit derivatives were one of the main causes of the crisis as being made in the absence of any evidence. He also dismisses the suggestion that credit default swaps can be transparent, liquid and well regulated only if they are conducted on exchanges. He says this assertion is unsupported by any evidence and is promoted by those exchanges who are seeking regulatory help to drive OTC business onto their platforms.