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May 8, 2012
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News Recap from ISDA's 27th Annual General Meeting
Now that ISDA's 27th Annual General Meeting has concluded, we've gathered all of the news coverage that originated from last week's event in Chicago. ISDA would like to thank all of the speakers, panelists and attendees for making the AGM such a memorable event. ISDA would also like to thank our sponsors and exhibitors for their support. We look forward to seeing you again next year.
Top News 
  • Nobel laureate talks euro's survival and "immaculate bailout"
    Nobel laureate Thomas J. Sargent participated in a panel discussion on global finance at the ISDA Annual General Meeting. Sargent addressed many topics, including how the government could perform an "immaculate bailout" to avoid technical default on debt. "You wouldn't have needed a bailout of any of the banks in the U.S. or any other institutions or houses underwater if in 2008 the United States had had a sudden, 30% jump in the price level -- a one-time jump in the price level," Sargent said. "It would have repaired a bunch of balance sheets, including all those homeowners who went underwater and all those financial institutions that were underwater because they had mortgages." SmartBrief/SmartBlog on Finance (5/1) LinkedInFacebookTwitterEmail this Story

The Leader in OTC IRS Clearing
SwapClear is LCH.Clearnet's global clearing service for interest rate swaps. We have over 12 years' experience, unparalleled risk management and more clearable IRS products than any other clearing house. No wonder Risk Magazine named LCH.Clearnet Limited Clearing House of the Year. swapclear.com.
Regulatory Roundup 
  • Gensler says swaps clearing mandate "achievable" by year end
    Gary Gensler, chairman of the Commodity Futures Trading Commission, said central clearing of standardized swaps could be mandated by the end of this year. However, Gensler avoided announcing any hard deadline, acknowledging the process is a "human exercise" that may be delayed. MarketWatch (5/2) LinkedInFacebookTwitterEmail this Story
  • Experts voice concern about clearing deadline for OTC derivatives
    Market participants are voicing concern about a last-minute rush as the deadline for clearing over-the-counter derivatives looms. "I think some people fear there's going to be a potential scramble once we get clarity on what's going to come," Daniel Maguire of LCH.Clearnet Group said at ISDA's Annual General Meeting. "So a lot of people are trying to get ahead of the curve, and firms have gone from testing the pipes to putting regular flow through, so they can get ready for the mandate and don't end up behind the stack." Risk.net (subscription required) (5/2) LinkedInFacebookTwitterEmail this Story
  • Clearing-location requirement is unlikely, Gensler says
    Gary Gensler, chairman of the Commodity Futures Trading Commission, said regulators in financial hubs worldwide are not expected to require local-currency trades to be cleared domestically. ISDA CEO Robert Pickel voiced concern about the possibility that regulators will demand local-currency trades be processed through a domestic central counterparty. "We must avoid a circumstance where more than one jurisdiction mandates that a trade be cleared in a clearinghouse in its jurisdiction," Pickel said. "That is a sure recipe for chaos." Risk.net (subscription required) (5/2) LinkedInFacebookTwitterEmail this Story
  • CFTC looks into which swaps must be cleared, official says
    Gary Barnett of the Commodity Futures Trading Commission said the agency might seek comments about which types of swaps should be guaranteed by clearinghouses as it aims to make a proposal within months. "We hope that in the next couple of months, we will move in that direction," Barnett said at ISDA's Annual General Meeting. Bloomberg (5/1) LinkedInFacebookTwitterEmail this Story
  • Banks examine client-fund protection, CFTC says
    Major banks are examining protection for clients' funds that back derivatives trades after MF Global Holdings collapsed in 2011, said Gary Barnett of the Commodity Futures Trading Commission. Full segregation of funds might not be possible, but banks are looking into alternatives to improve protection, Barnett said at ISDA's Annual General Meeting. Reuters (5/1) LinkedInFacebookTwitterEmail this Story
CFTC Weekly Swaps Report 
  • Industry accepts OTC derivatives rules, experts say
    Participants at ISDA's Annual General Meeting expect regulators to implement rules governing the swaps market, but the timetable remains unclear. Experts said steps taken by the industry indicate acceptance of such changes. "If you look at the amount of clearing that has been done and continues to be done among the dealers, it proves that they are committed to clearing," said ISDA CEO Robert Pickel. "Hedge funds are trying." Fox Business/Dow Jones Newswires (4/30) LinkedInFacebookTwitterEmail this Story
Collateral & Margin 
  • ISDA survey delves into collateralization increase at end of 2011
    ISDA's annual collateral survey revealed an increase in collateralization at the end of 2011 as market participants navigated a landscape marked by the eurozone debt crisis, downgrades of financial firms and reductions in interest rates. The survey estimates the amount of collateral circulating in the non-cleared over-the-counter derivatives market increased 24% to approximately $3.6 trillion for the end of 2011. The survey also found market participants appear to be preparing to centrally clear their trades in the future as the percentage of survey respondents performing daily portfolio reconciliations increasing from 31% to 48%. Read more about the ISDA 2012 Margin Survey Results. Risk.net (subscription required) (5/1) LinkedInFacebookTwitterEmail this Story
  • Global regulators work toward swaps-collateral standards
    Gary Gensler, chairman of the Commodity Futures Trading Commission, said European and U.S. regulators are close to a consensus on collateral standards for swaps. An agreement could allow the U.S. to defer supervision of such derivatives to other nations, said Gensler, who recently met with regulators from several jurisdictions. "I think it's achievable that we'll be on the same page down to the granular level," Gensler said at ISDA's Annual General Meeting. Bloomberg (5/2) LinkedInFacebookTwitterEmail this Story
  • Margining-requirement group will meet deadline, member says
    The Group of 20 nations tasked regulators with developing global margin standards for uncleared trades. Sean Campbell, deputy associate director at the Federal Reserve and a member of the Working Group on Margining Requirements, said at the ISDA Annual General Meeting that he is confident a June deadline for issuing a consultation paper will be met. "We are working hard on that deadline, and I am sufficiently confident, as a member of that group, that we are going to meet the June deadline to submit a proposal to the committees for their review," he said. Risk.net (subscription required) (5/1) LinkedInFacebookTwitterEmail this Story
  • Most OTC derivatives are protected by collateral, ISDA says
    ISDA said the percentage of over-the-counter derivatives trades protected by collateral increased from 80% last year to 84% this year. "As the survey clearly demonstrates, collateralization remains among the most widely used methods to mitigate counterparty credit risk in the OTC derivatives market," said CEO Robert Pickel. Download the ISDA Margin Survey. Bloomberg (5/1) LinkedInFacebookTwitterEmail this Story
Market Infrastructure 
Risk Management 
  • Panelists question agency's ability to spot risk
    Years after the start of the global financial crisis, many questions remain about the reason regulators failed to spot systemic risk. The U.S. responded by creating the Office of Financial Research, which is tasked with monitoring systemic risk and raising a red flag if such risk threatens to take down the system. However, panelists at ISDA's Annual General Meeting voiced concern about the office's ability to detect such risk and what will happen if a potential threat is discovered. Risk.net (subscription required) (5/1) LinkedInFacebookTwitterEmail this Story
Commodities 
AGM Press Releases 
More from ISDA 
  • Reduced Risk, Increased Transparency: ISDA's new Web brochure
     
    Our Web brochure debuted during the Chairman's Address at the 2012 ISDA Annual General Meeting in Chicago. It presents our efforts in counterparty risk reduction and transparency and highlights the global nature and unique structure of over-the-counter derivatives markets. See it! LinkedInFacebookTwitterEmail this Story
  

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