Yesterday the Federal Reserve met with a number of dealers, exchanges and other industry participants in order to try to speed up the creation of central counterparty for credit derivatives. As per my previous posts, the large dealers had already committed to setting up such a facility by the end of the year - but clearly the hysteria that is consuming both the markets and those looking on has increased the urgency to get this done as soon as possible. As one Fed official said at the start of the week: "The New York Fed will hold a meeting on tuesday with a small number of banks and buyside firms to discuss the progress being made towards the creation of a central couterparty for credt default swaps, which...will help with counterparty credit exposure and improve how the failure of a major participant would be addressed".

The meeting included officials from both the CME and ICE who are battling with the Clearing Corporation to build this facility. Neither party are interested in collaboration as ICE is already active in this market following its purchase of Creditex, and the CME has bought a CDS pricing information service and is thought to be ready to implement the CCP in a matter of weeks.

I am awaiting the Press Release from the Fed to announce what progress was made during the talks.