ECB's Coeure says post-Lehman swaps reform too patchy
* ECB's Coeure sees big information gaps in swaps
* Global swaps dealers' role needs "controlling"
By Huw Jones
LONDON, Sept 11 (Reuters) - The overhaul of financial derivatives five years after Lehman Brothers collapsed is still too patchy and risks an even more devastating crisis, a top European central banker said on Wednesday.
The bank's demise in Sept. 2008 left regulators in the dark over other banks' exposure to privately-traded derivatives contracts like credit default swaps at the stricken lender.
This uncertainty froze markets and prompted world leaders to require swaps to be recorded and pass through a clearing house, which is backed by a default fund so that a trade is completed even if one side of the deal goes bust.
Benoit Coeure of the European Central Bank's executive board said differing privacy laws, blocking statutes and multiple reporting venues means there is still no clear snapshot of the $630 trillion over-the-counter (OTC) market for regulators.
"In fact, at the current stage, no authority has a complete overview of the risks in OTC derivatives markets or is able to examine the global network of OTC derivatives in depth," Coeure said in a speech in Paris to assess progress on reforms.
The ECB becomes the main supervisor of top euro zone banks from next year and has a role in supervising clearing houses.
Coeure said risks will not only become concentrated at clearers but also at banks that act as a go-between for derivatives customers and clearing houses.
This is because many customers won't have deep enough pockets to deal directly with clearing houses as the requirement to clear swaps is rolled out.
Swaps trading is mostly done by about 15 global banks such as Goldman Sachs, Morgan Stanley, Deutsche Bank and HSBC.
It will be necessary to "control" the role of global dealers within each clearing house to make sure the interests of end users of derivatives are adequately heeded, Coeure said.
There has also been "virtually no progress" in global cooperation among supervisors of clearing houses and waiting for an emergency to inject urgency into task would be too late, as the 2008-09 banking crisis showed, Coeure said.
"And the consequences in the case of central counterparties would be even more devastating than what we have seen in the banking sector," Coeure said.
The reforms agreed by the Group of 20 leading economies (G20) had been scheduled to come into force by the end of 2012.
Differences over rules between the European Union and United States, where most swaps are traded, have led to delays and mandatory clearing of contracts will not come in until 2014 or later in some cases.
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