The level of details that needs to be implemented remains largely centered around efficient governance principles at the clearing houses or the exchanges with vertical silos, how the default process of members and the clearing house itself works. And participation by the largest variety of clearing members is a must.

Risk mitigation in central clearing structures is largely a function of members’ diversity and number rather than a function of members’ capital alone. The numerous Dodd-Frank provisions that still need to be processed will hopefuly provide the right answers, but we’ll have to wait a little longer to see how open and transparent the swap market will be in the future.

It’s also worth noting that the late exchange consolidation move into veritical silos increases risk if it means replacing bilateral risk with too concentrated clearing house risk. We should be also worried about how international regulators might consider the risk of a combined entity (exchange + clearing), and perhaps require general clearing members to take "charges" against capital because of large exposure to big clearing houses.

Ultimate governance at verticaly-integrated exchanges/clearing would involved sufficient public directors at all levels (e.g., board and committees) and business functions would be separate from regulatory functions; also there would not be artificial barriers to entry for non-clearing members or general clearing members. There would be certainty in the case of the insolvency of any GCM clearing cross border. GCMs would not be obligated to a clearing house within the vertical silo exchange family for defaulting members clearing products they themselves do not clear.

But the question today has shifted from: "What market structure do we need for more transparency and less risk?"  to: "Does Dodd-Frank add cost and burden to an economy that has not recovered yet?"

The debate has moved from a technical discussion on market structure and risk into a more empirical and political discussion on Dodd-Frank’s impact on growth and jobs. This is obviously appealing to U.S. legislators and, even though difficult to demonstrate, that might be enough to prolong our journey in the tunnel looking for more transparency and less risk.