The US Commodity Futures Trading Commission (CFTC) says it will work more closely with German regulators on cross-border clearing.

In a memorandum of understanding (MOU) signed this week, America’s futures and options watchdog pledged greater cooperation with Germany’s BaFin and Deutsche Bundesbank.

Specifically, the parties said they will meet periodically to update each other on contingency planning, adequacy of existing arrangements, systemic risk concerns and default procedures.

Regulators across the globe have mandated that derivatives move into clearing houses, meaning each central authority can collect collateral from entities involved in a trade.

The idea is to cover potential losses should a counterparty default, preventing the kind of turmoil seen in the derivative markets with Lehman Brothers in 2008.

In response, clearinghouses on both sides of the Atlantic have been expanding at a rapid rate, with some industry officials now concerned that they themselves are becoming centres of concentrated risk.

CFTC stats show more than 50% of trading in the global swap market takes place on a cross-border basis.

Significant conflicts, however, remain between US and European rules for clearing swaps.