I hear that some dealers are suggesting that they will not become members of CCPs which are not deemed to be robust. This brings some interesting questions to the table. A good start is that dealers have long traded OTC derivatives with non-robust counterparties so why are they concerned now? They took in good collateral, good margin and risk coverage to protect themselves, so why can't they consider a similar scenario with a CCP? If the CCP has good methods, risk control and a sound financial base then they must be considered a safe clearer. However, all these good values come at a price – and that is the nub.

A robust, well financed, well run CCP cannot possibly charge the same as some of its lesser quality peers. It must charge higher fees, higher membership costs and of course higher margins if it is to provide genuine assurance of quality. There is no such thing as a free lunch. Risk equals cost.

So we get to the crux - should dealers choose to be members only of the highest quality CCP, they may find that there are fewer members alongside them because of the associated costs, and that there isn't much trading going on since the fees are too high: everyone seems to be clearing on the 'backstreet' CCP.

What we then have is a situation where we get a creep back to other CCPs, just to get business, and risk models get undermined. As it is, I believe that if enough players are members of any CCP then it won't be too painful if it hits the rocks, or the government steps in to defend it, because of the political capital invested in this wonderful new legislation.