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Credit Suisse, Goldman Said Mulling Plan to Promote CDS Clearing

  • Moves come amid industry push to revive shrinking market
  • Settling trades through clearinghouses can lower bank costs
Updated on

Two of Wall Street’s biggest credit-default swaps dealers are considering plans that could help revive trading in a key part of the market -- just as an increase in corporate failures boosts demand for loss insurance.

Credit Suisse Group AG and Goldman Sachs Group Inc. may offer better pricing to clients that agree to settle their transactions through a clearinghouse, which can lower the cost of the trades for the banks, according to people with knowledge of the discussions. Because post-crisis regulations have left the clearing option voluntary in that part of the market, investors have had few incentives to change practice. That’s caused dealers to increasingly pull back, with Deutsche Bank AG saying last year that it would exit most of the so-called single-name market.