Reuters reports:
Reforming the $450 trillion derivatives market is key to removing the risks of financial markets, and greater central clearing of privately traded derivatives is a vital part of that, the head of the Commodities Futures Trading Commission said on Friday.
Central clearing, in which a counterparty stands between two trading partners and guarantees the trade, is needed to remove risks from banks, Gary Gensler, chairman of the CFTC, said at a conference hosted by the American Bar Association in Naples, Florida. He also called for greater transparency.