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Today I would like to reflect a bit on some issues which I know the International Swaps and Derivatives Association (ISDA) cares about deeply.
As you know, in the wake of the financial crisis the Group of Twenty (G20) leaders kicked off an ambitious plan for global financial reforms.
The initial G20 vision was for a set of global, top-down harmonised regulations to prevent future crises.
We have been told that rulemaking is all but finished, and that we are now in the implementation phase. Well, as many of those in the world of over-the-counter (OTC) derivatives know all too well, that is not really the case. As of today, many of these reforms are still very much a work in progress.
And this is as true for the world of derivatives as it is for other projects such as cross-border recovery and resolution of large banks facing liquidity or solvency crises.
OTC derivatives
Now I know that, quite rightly, Keith and his colleagues at ISDA have been working overtime on the new frameworks for OTC derivatives to be traded on exchanges or electronic trading platforms, to be centrally cleared, reported and margined bilaterally if not cleared. ISDA’s recent work on temporary stays in the context of possible central counterparty (CCP) failure has been discussed a great deal in regulatory circles.
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