Bloomberg News

Swaps Dealers Resist European Derivatives Reform, Tabb Says

December 07, 2011

Dec. 7 (Bloomberg) -- Dealers in Europe are resisting regulatory changes to over-the-counter derivatives because of the costs of setting up central clearing services, according to research and advisory firm Tabb Group.

About 70 percent of dealers are lobbying against reforms while continuing to build out operations, Will Rhode, a senior research analyst at Tabb in New York, wrote in a study released today. The report was based on interviews with 24 swap dealers, including the European operations of U.S. firms.

Top-tier banks are planning to spend at least $100 million annually on derivatives reform, while mid-tier firms expect to spend tens of millions, Tabb said. The global over-the-counter swaps market is $708 trillion, according to the Basel-based Bank for International Settlements. Derivatives, including swaps, are financial contracts tied to interest rates, currencies or events, such as a company default.

--Editor: Michael Shanahan

To contact the reporter on this story: Abigail Moses in London at Amoses5@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net


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