Morgan Stanley said it expects central clearing of over-the-counter (OTC) derivatives to provide a $1 billion revenue opportunity for clearinghouses starting in 2012.

"We expect significant levels of standardized OTC derivatives to be centrally cleared in two-to-three years, driven by changes in legislation and regulation, decreased tolerance for counterparty risk post-Lehman, increased demand for transparency and reduction of systematic risk," Morgan Stanley said.

About 60 percent of total OTC derivatives outstanding will be centrally cleared in two-to-three years compared with the current level of 20 percent, it said.

"The clearing revenue opportunity is global and will be partially dependent on in which region contracts are traded and which clearinghouse clears it," Morgan Stanley said.

Central clearing, in which a clearinghouse stands between the two parties to a trade and assumes the risk of a default, is seen by U.S. and European regulators and legislators as key to reducing risks of derivatives due to the maze of exposures the contracts create between firms.

Last week, the U.S. House of Representatives approved a section of the reforms bill that would impose regulation for the first time on the $450 trillion over-the-counter derivatives market, including credit default swaps (CDS).

The global CDS market is worth about $26 trillion and has been under scrutiny as governments push the wider derivatives market through central clearinghouses.

IntercontinentalExchange Inc, the derivatives exchange operator, has already taken the lead in clearing CDS, as governments push to install central counterparties in the private market blamed for exacerbating the financial crisis.

CME Group Inc, the world's largest derivatives exchange operator, also began clearing U.S.-based credit derivatives from Tuesday.