CME Group Inc. (CME) is maintaining its focus on clearing credit default swaps in Europe, despite rivals pulling ahead in the last month, according to the company's newly appointed head of European clearing.

A clearing infrastructure for credit derivatives will give CME the framework it needs to clear other over-the-counter products, like interest rate swaps, said Andrew Lamb, chief executive of CME Clearing Europe.

"Once you have a clearing system up and running, then it's possible to expand the offering of clearing," said Lamb, a former CEO of LCH.Clearnet who joined CME in July, speaking Thursday at a derivatives industry conference in Interlaken, Switzerland.

CME is working to win approval from the U.K. Financial Services Authority for its London-based clearing service, which the company sees as part of a global offering for credit derivatives.

However, rivals IntercontinentalExchange Inc. (ICE) and Eurex have already begun clearing swaps in Europe after signing up major banks to support their efforts.

Applying the clearinghouse model to over-the-counter products like credit derivatives is seen by financial regulators and market participants as one way to reduce systemic risk in off-exchange markets, which have come under scrutiny in the financial crisis.

The $26 trillion credit default swap sector isn't the biggest OTC market - the interest rate swap sector is far bigger, at more than $400 trillion.

But credit derivatives have drawn focus due to the products' high-profile role in the turmoil at dealer banks and the insurer American International Group (AIG) last year.

CME is also developing a credit default swap clearing platform in the U.S., where it received regulatory approval to launch in March. But that effort remains stalled as the exchange operator tries to win support from dealer banks that control the majority of trading in the CDS market.

CME is not alone in its view of credit default swaps as a portal to other OTC markets.

Andreas Preuss, chief executive of Deutsche Boerse's (DB1.XE) futures unit Eurex, said Wednesday that the Frankfurt-based exchange could apply its Credit Clear CDS clearing service to other products.

Eurex Credit Clear debuted just ahead of dealer banks' July 31 deadline to begin routing credit derivatives transactions to European clearinghouses, and to date has handled $131 million worth of transactions.

IntercontinentalExchange Inc., which counts 10 of the biggest dealers as members in its ICE Clear Europe solution for credit default swaps, has cleared nearly $300 billion since launching its own European service in late July.

In the U.S., ICE has cleared more than $1.9 trillion in CDS transactions since launching its ICE Trust facility in March.

-By William Launder, Dow Jones Newswires; +49 69 29 725 515; william.launder@dowjones.com; and Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com