The Federal Reserve Bank of New York has announced that 15 major over-the-counter derivatives dealers have committed to specific target levels for expanding central clearing for OTC credit and interest rate derivatives.

The dealers made the commitment in a letter to the New York Fed that sets targets both for submitting new trades to central counterparties and for clearing historical trades. These targets will be increased over time as dealers improve their capacity to clear trades. In addition, the major dealers are agreeing today to report a broader set of data that will allow regulators to better monitor CCP usage.

The list of dealers included in the initiative are Bank of America-Merrill Lynch, Barclays Capital, BNP Paribas, Citigroup, Commerzbank AG, Credit Suisse, Deutsche Bank AG, Goldman, Sachs & Co., HSBC Group, JP Morgan Chase, Morgan Stanley, Royal Bank of Scotland Group, Société Générale, UBS AG and Wachovia Bank, N.A.

“Over the last year, regulators have worked to increase OTC derivatives clearing in order to enhance the resilience of the financial system. These targets will push major dealers to accelerate their progress. We also expect them to work with central counterparties to rapidly expand the universe of eligible products and to continue to increase clearing levels beyond these initial targets,” said New York Fed president, William Dudley.

Supervisors expect market participants to set increasingly stringent targets over time and the New York Fed says it will continue to work with other domestic and international banking supervisors to monitor market progress on these objectives.