Credit default swap clearing may be the new black in many quarters but, like the vagaries of fashion, it is beyond many consumers’ ken. Counterparty risk has shot to the top of the regulatory agenda in the US and Europe since the high-profile failures of Lehman Brothers and insurance group AIG towards the end of last year.

The collapse of Lehman in September left the buyers of CDS owed about $400bn (€280bn), while the insurance group estimated its notional outstanding exposure to CDS at $2.7 trillion.