The risk of investor default in the foreign-exchange swap and forward markets is large enough to justify processing trades through clearinghouses, Stanford University professor Darrell Duffie said.

The U.S. Treasury Department in April proposed exempting the trades from most rules required by the Dodd-Frank Act, in part because default risk "is relatively small." The law requires foreign-exchange swaps and forwards to be subject to clearing and trading rules unless Treasury decides the derivatives are different from other types of swaps.

Banks and investors would have been owed $925 billion as of June 2010 if all foreign-exchange swaps and forwards had been settled, before the effect of netting positions, Duffie wrote in a comment submitted to the Treasury Department. That's more than the amount for equities or commodities swaps and about 60 percent of the number associated with credit-default swaps.