The global financial meltdown may unravel recent efforts by regulators to foster cross-border cooperation, according to the chief executive of IntercontinentalExchange Inc. (ICE).

Jeffrey Sprecher, CEO of the Atlanta-based exchange, said Friday that he sees financial regulators becoming increasingly focused on domestic issues rather than working with foreign counterparts on cross-border solutions, as they have in recent years.

"Over the last 60 days, the trend that's emerged regulation-wise is a sense of nationalization, with U.S. regulators trying to figure out U.S. problems and European regulators trying to figure out European problems," said Sprecher.

"We need global cooperation between regulators," he said. "But the pendulum may be swinging too far toward the national footprint."

The provincialism Sprecher sees at work in the regulatory sphere also extends to a potential bidding war over London-based clearinghouse LCH.Clearnet Group Ltd., where Sprecher sees defensive positioning by European banks and dealers as market participants look to clear more over-the-counter trades.

U.K. inter-dealer broker Icap PLC (IAP.LN) is leading a consortium looking to challenge a merger between LCH.Clearnet and New York-based Depository Trust & Clearing Corp., first announced last fall.

The merger would create the world's biggest processor and guarantor of equity, bond and derivatives trades, and would solidify banks' position in the clearing business as exchanges look to internalize more of these functions - particularly in over-the-counter markets for instruments like credit derivatives and interest rate swaps.

"You're seeing business go from opaque, bilateral deals into transparent, electronic trading, with the changes in the structure of dealers and credit concerns," said Sprecher, speaking Friday at a Credit Suisse conference. "So the London clearinghouse is a great asset to own as these things are changing."

He would know: ICE in October moved to acquire the Clearing Corp., a bank-backed clearinghouse based in Chicago that ICE has incorporated into its credit derivatives clearing platform ICE US Trust.

Sprecher, whose exchange in November transferred its clearing business from LCH.Clearnet to ICE's own European clearinghouse, said a big part of the debate over the London-based clearinghouse's fate is whether it should have ties to the United States or remain under European control.

The trans-Atlantic battle over LCH.Clearnet "plays into the whole sense of nationalization right now," Sprecher said.

DTCC has insisted that its proposal for merging with LCH.Clearnet would see the London clearinghouse remain under the jurisdiction of European authorities.

The Icap-led consortium is reported to include French bank Societe Generale (13080.FR), as well as Morgan Stanley (MS).

DTCC said Tuesday that the merger is progressing; the Icap consortium is reportedly considering a EUR12-per-share bid, which would top the EUR10 per share offered by DTCC.

DTCC handles the bulk of clearing services for equities and municipal bonds in the U.S., as well as processing over-the-counter derivatives trades. LCH.Clearnet's client base includes London Stock Exchange PLC (LSE.LN) and units of NYSE Euronext (NYX).

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com