The International Swaps and Derivatives Association, Inc. (ISDA) today made the following comment on the President’s Working Group on Financial Markets’ (PWG) series of initiatives to strengthen oversight and the infrastructure of the over-the-counter derivatives market:
"The PWG’s initiatives demonstrate the close cooperation of financial market participants and their regulators to ensure the continued health and vitality of the privately negotiated derivatives markets. This collaborative process has already produced significant results, but more work remains to be done. ISDA is committed to working with regulators and industry to ensure the OTC derivatives markets continue to play their important role in allowing companies and investors to manage risks, which is more important than ever in these turbulent markets," said Robert Pickel, executive director and hief executive officer, ISDA.
ISDA endorses the PWG’s call for the adoption of best practices with respect to risk management for OTC derivatives activities, including public reporting, liquidity management, senior management oversight and counterparty credit risk management. This also includes the use of legally-enforceable netting and collateral agreements between counterparties where possible. ISDA has facilitated the use of netting, as well as rigorous collateral management practices, since its founding and will work with its members to ensure continued wide-spread adoption and adherence to these best practices.