The Trac-x and iBoxx family of credit derivatives indices are to be merged after the 16 global banks backing the competing measures buried their differences.
The banks have signed a letter of intent to develop an agreed set of indices and create two separate companies covering the US markets and Europe and Asia. Dow Jones, which is currently responsible for operating the Trac-x index, will take over the marketing and licensing of the indices in both regions.
The move is expected to introduce a new set of standard trading contracts and boost liquidity in the credit derivatives market. It follows months of behind-the-scenes wrangling between rival banks fearful of losing ground in a rapidly growing market.