The European Union's (EU) plans to get banks and other users of credit default swaps to get on board a centralized clearing house have failed.

However, market reports indicate that the EU's next move could see regulators introducing rules that force users of CDS to use the central clearing house to make the markets less risky for buyers.

The derivatives industry agreed in principle at a meeting with EU officials on Dec 10 to introduce voluntarily central clearing of off-exchange traded contracts within six months.

The EU's objective was to set up a clear roadmap on how to ensure credit default swaps are cleared through a central counterparty, although some industry groups have been reluctant.

The deal collapsed over the rule that the clearing of EU-based trades must be done inside the 27-nation bloc.

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