Consolidation The present regulatory environment offers almost as many incentives to create clearing houses as it does to consolidate them.

It is a little-known fact, for example, that up to 50% of clearing houses' revenues are generated by the net interest income they receive on the cash collateral posted to them by their users. The regulatory mandate under the European Market Infrastructure Regulation to clear OTC derivatives therefore presents clearers with a rich potential source of additional revenue: derivatives are cash-collateral intensive.