Banks block CME's credit swap plans

CME Group Inc.'s plan to guarantee trades in the $29 trillion credit-default swap market is being hampered by some of the world's largest banks, according to a letter from BlueMountain Capital Management LLC.

"The dealers suggested more than once that there is room for only one solution in the market," Samuel Cole, chief operating officer at New York-based BlueMountain, wrote today in a letter to banks.

Dealers including Morgan Stanley and Goldman Sachs Group Inc. have a revenue-sharing agreement with CME's competitor, Intercontinental Exchange Inc., owner of the ICE Trust clearinghouse.

CME spokesman Allan Schoenberg said he hadn't seen a copy of the letter and couldn't immediately comment.