Regulators want to get a peak at the world of non-standard CDSs:
The Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission want information about credit-default swaps that don't conform to standard terms to be disclosed in a central warehouse that would make sure all trades get recorded, said the person, who declined to be identified because the discussions are private. The requirement would provide more detail about the types of contracts that almost drove American International Group Inc. into bankruptcy.My prediction: they will not like what they see. The number of bespoke CDSs is much higher than people commonly believe. But I suspect what will really shock the regulators are the terms of the bespoke CDSs. Some of the (non-standard) amendments the parties add in the Confirmations and Credit Support Annexes are just outrageous. If I get a chance tomorrow, I'll post my favorite amendment I've run across so far (which one trader dubbed the "embedded option to screw your wife").