It seems regulators are again after the evil dealers. Since dealer to dealer trading accounts for most of the volume in the CDS market, and the dealers all invest in Markit, they must be doing something wrong – right? I just can’t see how this case has any merit, nor does the timing of the antitrust case make sense. When I first read the headline I thought it was going to be a fraud thing – but upon realization that is was about competitiveness I was confused. With huge OTC derivatives reform happening around the world that presumably will open up the market to more competition (we’ll save that issue for another day), why bring an antitrust suit now? If an oligopoly really does exist won’t derivatives reform end it anyway?
“The undertones through this whole process have been to take power away from the big banks,” said Kevin McPartland, a senior analyst with Tabb Group in New York. “This seems like another sort of attack on the banks.”