Discussion Papers

The ISDA Discussion Papers are a new series of publications covering key topics in derivatives, public policy and financial regulation. Each is aimed at informing debate, encouraging discussion and illuminating public policy options as the derivatives markets evolve. Since its inception, ISDA has led the debate on derivatives matters, and the discussion paper series continues that tradition of thought leadership.

 


DateTitle / DescriptionDocuments
November 10, 2011
Costs and Benefits of Mandatory Electronic Execution Requirements for Interest Rate Products
An in-depth discussion and analysis of the impact of electronic execution requirements on OTC derivatives markets that were mandated by the Dodd-Frank Act. The paper explores and analyzes whether the market structure being developed by the CFTC to implement these requirements will meet the CFTC’s key goals: increase the efficiency of the market by reducing transaction costs, improving access to markets and increasing transparency. The paper also assesses the costs and expenses that market participants and ultimately end-users are likely to bear as a result of the mandate’s implementation. The analysis was developed by ISDA staff and consultants in conjunction with NERA Economic Consulting.
ISDA Mandatory Electronic Execution Discussion Paper.pdf
May 23, 2011
The Economics of Central Clearing: Theory and Practice, by Dr. Craig Pirrong, University of Houston
Regulations requiring the clearing of certain OTC derivatives through central counterparties (CCPs) are causing a profound change in market structure and trading practices. This paper discusses how CCPs are structured and what effects increased use of them will have on the financial system. Craig Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business at the University of Houston. His research focuses on the economics of the organization of financial markets, including the economics of exchange and OTC markets, and the economics of clearing and other mechanisms for allocating counterparty credit risk. He has consulted widely with exchanges around the world, has testified before Congress on energy pricing, and has served as an expert witness in a variety of cases involving derivatives and commodities markets. He holds a Ph.D. in business economics from the University of Chicago.
ISDAdiscussion_CCP_Pirrong.pdf