The planned merger of two companies working together to establish a credit-default swap clearing house has bolstered the case for Federal Reserve Board to have ultimate oversight of the $60 trillion CDS market, observers say.

IntercontinentalExchange Inc. of Atlanta, which has been working with Federal Reserve Bank of New York to launch a central clearing house in New York for the swaps, said Thursday that it is buying its partner in the project, Clearing Corp., a Chicago firm that has won the backing of such major CDS players as JPMorgan Chase & Co., Bank of America Corp., and Morgan Stanley.

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