Regulatory efforts to guarantee credit-default swaps with a clearinghouse may be hampered by a shrinking market and a limited number of participants, according to Stanford University finance professor Darrell Duffie. A plan lead by Intercontinental Exchange Inc. has the backing of eight major dealers including JPMorgan Chase & Co. and UBS AG. At the same time, the outstanding notional value of credit-default swaps has shrunk 56 percent since 2007 to $27 trillion. The small number of banks and dwindling market may make clearing unworkable, Duffie said in an interview yesterday. “It turns out the numbers don’t justify the way it’s proposed,” Duffie said. “The numbers just don’t add up.”

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