When I was a first-year law student, my grades were insufficient to qualify me for a slot on the Yale Law Journal. Happily, the Journal admitted one additional individual through a writing contest and I won.

My article was about a judicial opinion in the case of United States v. Jerrold Electronics, a fledgling cable TV provider that required subscribers to buy a service and repair contract as well. In antitrust parlance, this was a "tie-in" where a customer could not buy what he or she wanted (here, cable TV) without purchasing something else as well (in this case, a service contract).

Tie-ins are generally illegal under U.S. competition laws. But Jerrold argued that, in brand-new industries like cable TV at the time, any malfunction in the system could be ruinous as customers would abandon the new technology and return to their trusty antennas (or no TV if the signal was unavailable).

The court agreed. So did I. What good is a product if it is not reliable? Every vendor knows this to be true. It did not seem unreasonable to insist on purchase of a Jerrold service contract. After all, who knew the system better than they did? And who had more to lose from malfunctions?

That is my "take" on the current debate over whether derivatives exchanges should require use of their own clearing houses, or should be forced to allow trades created there to be shopped to whatever clearing organization offers the most appealing terms.

My view that the "vertical silo," integrated with the originating exchange, is best results from both history and an apprehension of where the alternative may be heading.

First, the combined exchange/clearing model flew above the recent financial turmoil, requiring zero bail-out money. A mix of daily mark-to-market ("show me the money!") and mutualisation of risk provided ample protection. So, it works even in treacherous times.

Second, some who advocate a choose-your-clearer system also favor giving traders the right to insulate their funds against a default by anyone else, the opposite of mutualised risk. They might also shop for a clearing house with lower minimum capital requirements for its members, or smaller mandatory contributions to its guarantee fund, or less frequent margin calls, or . . . other features that weaken its safety net. Maybe not but why else would one want or need multiple choices?

It can be argued, of course, that traders could benefit from netting across positions at multiple exchanges if they could clear everything in one location of their choosing. But would any exchange be comfortable with that if the selected clearing house were perceived to have weaken credit safeguards than its own? Besides, the argument speaks as persuasively in favor of a single clearing organisation with the toughest standards.

However the debate plays out, I urge regulators to resist assigning the term "clearing house" to any organization that lacks the features displayed so impressively during the recent crisis.