The International Swaps and Derivatives Association, Inc. (ISDA) today issued the following statement from chief executive officer Robert Pickel in respect of the Obama Administration’s proposals for financial services regulatory reform:
"ISDA applauds the Administration’s goal to modernize and enhance the regulatory structure for the broader financial services landscape, and supports the proposal’s key objectives. The Association believes that today’s proposal, along with other initiatives already announced by the US Treasury, provide an important framework for financial regulatory reform."
“The Association and our more than 800 members are gratified that these regulatory proposals acknowledge the benefits of privately negotiated derivatives, and will continue to enable companies to use these risk mitigation tools to manage their risks. We intend to continue our dialogue with the Administration, Congress and regulators to ensure that companies have the ability to custom tailor risk management solutions to meet their individual needs."
"At the same time, ISDA remains committed to helping develop an appropriate and resilient regulatory framework for global financial activity. We recognize that the industry today faces significant challenges, and we are urgently moving forward with new solutions. Towards this end, ISDA supports the appropriate regulation of financial institutions that have such a large presence in the financial system that their failure could cause systemic concerns."
“In addition, ISDA and the industry support initiatives for improving transparency that would provide policymakers with the information they need to carry out their authorities under the law. This new framework calls for trades to be cleared or, if not cleared, to be reported to a trade repository."
“Finally, the Association and our members also continue to make significant progress on a range of initiatives designed to strengthen the industry’s infrastructure. This includes: standardization of trading terms; improvements in the trade settlement process; greater clarity in the settlement of defaults; and a more open industry governance structure.”
Pickel has emphasized the beneficial role that privately negotiated derivatives play in the global economy and for individual companies in testimony before the US House and Senate. This testimony also describes the robust infrastructure that ISDA and industry participants have developed and continue to reinforce. Details of the Association’s and the industry’s efforts, a detailed summary of regulatory commitments and copies of Pickel’s testimony are all available at the Association’s website: www.isda.org.