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Tag Archive: ISDA


International Swaps and Derivatives Association is the body corporate to make over the counter (OTC) derivatives market CDSDEFAULT-1-1safe and efficient.

It has 815 members from 58 countries including global, international and regional banks, asset managers, energy and commodities firms, government and supranational entities, insurers and diversified financial institutions, corporations, law firms, exchanges, clearinghouse and other service providers.

The Key areas of ISDA are
* Reducing counterparty risk
* Increasing the Transparency
* Improve the OTC operational infrastructure.

The details are provided on the ISDA Brochure

ISDA came under criticism in 2012 on its decision that based on evidence the Greek bailout would not prompt payments on the (CDS) credit default swaps.
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Dr. David Murphy of the Deus ex Machiatto blog has published a comprehensive book on clearing of OTC derivatives (OTC blogDerivatives, Bilateral Trading and Central Clearing, Palgrave Macmillan, 2013). I was surprised that the author information on the book cover flap does not mention the blog at all but gives prominence to his having been head of risk at ISDA..

The book presents a balanced discussion of most issues while of course leaning towards the ISDA view of things. Many of the arguments in the book against the clearing mandate would be familiar to those who read the Streetwise Professor blog. Yet, I need to read the book completely the information sharing is from the extract.

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downloadAs, Our blog is on global finance markets which, also includes OTC market as a major part of it. OTC market is regulated by ISDA guidelines thereby, ISDA acts as a “bible for an entire OTC Market”. Hence, our topic for today`s discussion is ISDA.

ISDA stands for “INTERNATIONAL SWAPS & DERIVATIVES ASSOCIATION“. ISDA is an association created by the private negotiated derivatives market that represents participating parties. This association helps to improve the private negotiated derivatives market by identifying and reducing risks in the market. Continue reading

To start with yesterday western markets tumbled and today morning Asia trading in the red. The ghost of greek debt default could wreak $1-trillion damage on euro-zone.

Stocks down, gold down, oil down, copper down, EU periphery debt down. The day is shaping up to be the worst for risk thus far in 2012.

The deal is turning on the screws, my last post on where ISDA Under criticism on GREECE indicates that Investors are under pressure to sign up to the deal, which will see them lose almost three-quarters of the value of their bonds.

Greece wants creditors who hold 90% or more of the debt to agree. If take-up falls below that but exceeds 75%, it is expected to force losses on those who do not willingly sign up, known as collective action clauses (CACs). Continue reading

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