Morgan has been simulating trades in interest rate derivatives on 250 PCs in its London offices.
According to the Association of Corporate Treasurers, the vast majority of interest rate derivatives involve financial companies, such as banks, investment firms, insurers and hedge funds.
From next April they will be allowed, bringing them into line with interest-rate derivatives.
The project is the brainchild of Richard Sandor, a former economist with the Chicago Board of Trade, best known for founding the international market in interest-rate derivatives.
There is still money to be made trading currencies, interest-rate products, equity derivatives (popular when markets are volatile) and corporate restructuring.
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Duffy and Donohue argued that the two exchanges rarely competed directly, and that their chief competition wasn't other futures markets but the vastly larger markets in over-the-counter derivatives like interest-rate swaps.
The cme Group is going up against its own customers--banks like Barclays, jpmorgan and Merrill Lynch, that is--by introducing over-the-counter derivatives, including interest-rate swaps.
Greifeld has bought exchange companies in Boston and Philadelphia, as well as Stockholm's OMX Group, with exchanges in northern Europe, to increase the trading of securities and derivatives like options and interest rate swaps.
The cme Group is going up against its own customers--banks like Barclays (nyse: BCS - news - people ), jpmorgan and Merrill Lynch (nyse: MER - news - people ), that is--by introducing over-the-counter derivatives, including interest-rate swaps.
All cleared OTC derivatives will be available including interest rate swaps, credit default swaps, energy swaps, non-deliverable forwards and equity swaps.
Their most publicised activities, such as using derivatives to speculate heavily on interest-rate or exchange-rate movements, are hardly the kind of activity that will endear them to politicians.
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Insiders say the biggest exposure may be in the interest-rate swaps market, which is many times larger than those for credit derivatives.
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On January 5th rumours swept Wall Street that derivatives losses had brought Bank of America low, and that the interest-rate cut had been intended to keep this bank alive.
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