The financial crisis that has buffeted the global financial markets since the summer of 2007 may well lead to one of the most dramatic reworkings of the regulatory framework that governs financial markets and their participants since the 1930s. In all likelihood, a key element of any reform will address how to contain systemic risk and ensure the stability of the financial system. While this will require action on many different fronts, it is almost certain that derivatives—and in particular, credit derivatives—will be a major focus of that effort.

So far, 2009 has been a busy year. On March 26, Secretary Geithner introduced the Administration’s framework for comprehensive regulatory reform of the financial regulatory system (the “Treasury Framework”). Prior to that, multiple bills were introduced in the U.S. Senate and House of Representatives that impact, in varying degrees, credit derivatives and, in some cases, all OTC derivatives. In addition, final regulatory hurdles were overcome for two central counterparties (“CCPs”), and clearing of certain standardized credit derivatives began in the United States for the first time.

This Client Alert addresses those and other recent developments concerning credit derivatives in the United States.

Please see full alert for more information.