ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES
ASSOCIATION, INC.
NEWS
RELEASE
For
Immediate Release Friday, April 23, 2010
San Francisco Press Room: +1 415–772–5422 (April 21 -
April 23, 2010)
Rebecca O'Neill, ISDA London, +44
203 088 3586, roneill@isda.org
Cesaltine Gregorio, ISDA New York,
+1 212-901-6019, cgregorio@isda.org
Donna Chan, ISDA Hong Kong, +852
2200 5906, dchan@isda.org
ISDA
2010 Preliminary Margin Survey Results: Collateralization of CDS Exposures at
97 Percent
SAN FRANCISCO, Friday, April 23, 2010 – The International Swaps and Derivatives Association, Inc.
(ISDA) today released preliminary results from its 2010 ISDA Margin Survey at
its 25th Annual General Meeting in San Francisco.
Among
large dealers, 78 percent of all transactions are
now executed with the support of a collateral agreement. In respect of credit
derivatives, 97 percent of trades are subject to collateral agreements.
“The
need for effective and efficient risk management will continue to drive demand
for OTC derivatives,” said Conrad Voldstad, ISDA Chief
Executive Officer. “Collateralization remains among the most
widely used methods to mitigate counterparty credit risk and, as ISDA’s 2010 Margin Survey demonstrates, market
participants have increased their reliance on collateralization steadily over
the years.”
The 2010 Survey reports that collateral agreements in place now
number almost 172,000, of which 83 percent provide that either party may be
required to deliver collateral (a two-way obligation), up from 75 percent last
year. Among firms that responded in both the 2009 and 2010 surveys, the number
of collateral agreements grew by 14 percent.
ISDA continues to develop a strategic vision for the derivatives industry to make derivative processing more scalable, transparent and resilient in all asset classes.
The process of reconciling collateralized
portfolios shows steady advances in adoption. About 90 percent of all survey
respondents indicated that they periodically perform portfolio reconciliations,
with the major dealers doing so on a daily basis.
Throughout
2009, ISDA and the industry remained focused on driving significant
improvements in key
areas, such as strengthening counterparty risk management, including greater
use of clearinghouses; improving transparency; and building a stronger and more
resilient operational infrastructure. Significant progress in each of these
areas has been made and continues to be made as the industry works proactively
and cooperatively with regulators and policy makers globally.
Of the 89 firms responding to the
2010 ISDA Margin Survey, 70 are banks or broker-dealers, and the remaining are
institutional investors, government agencies and other end users.
About ISDA
ISDA,
which represents participants in the privately negotiated derivatives industry,
is among the world’s largest global financial trade associations as measured by
number of member firms. ISDA was chartered in 1985, and today has over 820
member institutions from 57 countries on six continents. These members include
most of the world’s major institutions that deal in privately negotiated
derivatives, as well as many of the businesses, governmental entities and other
end users that rely on over-the-counter derivatives to manage efficiently the
financial market risks inherent in their core economic activities. Information about ISDA and its activities is
available on the Association's web site: www.isda.org.
ISDA®
is a registered
trademark of the International Swaps & Derivatives Association, Inc.