The European Commission said today it intends to make proposals to control risks in the $60 trillion credit derivatives market, seen as one of the causes of the worst financial crisis in 80 years.
"Regulators need to have a much better view of where the real risks in these instruments lie," EU Internal Market Commissioner Charlie McCreevy said in a statement.
"I would like to have by the end of this year concrete proposals as to how the risks from credit derivatives can be mitigated," Mr McCreevy said.
The contracts are traded over-the-counter or off an exchange, and therefore more lightly regulated with risks less controlled.
Contracts could be standardised more, Mr McCreevy said.
"But there is a far more pressing need and that is to have a central clearing counterparty for these derivatives," he said.