New auction to solve settlement woes

New angles

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The bankruptcy of Delphi Corporation, the world's largest auto-parts maker, has prompted another, more complex version of the auction used to cash-settle outstanding credit derivatives index and tranche trades. The latest protocol is seen as a step towards making cash settlement a standard item in future contracts.

"With each protocol we do and each auction we do to determine a cash price for bonds, there is an improvement. Each will be a basis for how index trades will be settled and

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