News: ISDA AGM 2013 | Virtually There

25 April 2013 | Bill Hodgson

For the many who couldn't attend this years ISDA AGM, below is a round up of the key stories. If any of the attendees have anecdotes, incriminating pictures or gossip, please send it over.

Best quote of the AGM, courtesy of Risk: Athanassios Diplas, a senior adviser to the Isda board said: "If I tell you every time you buy a slice of pizza you have to put down $1,000, you are not going to eat a slice of pizza – you are going to eat something else." [Referring to the margin proposals for uncleared OTC trades.]

Read the articles below then come back and read Craig Pirrong's take on them: http://streetwiseprofessor.com/?p=7200

Trade Reporting

  • The current approach *might* lead to fragmentation: Risk Asia Here
  • Two sets of rules (EMIR & Dodd Frank) is a pain says Ollie Stuart: Risk Here


  • It's all the fault of the banks for lobbying regulators that we're in a mess, apparently: Risk Asia Here
  • The extra-territorial issues will slow the world economy, says ISDA Deputy CEO George: Risk Asia Here


  • Default of one bank who is a member of six major CCPs could bankrupt a country: Risk Asia Here
  • Clearing will amplify the impact of the Financial Transaction Tax: Asia Risk Here
  • CCPs are the next "too big to fail": IFR (free)
  • The proposed rules for margining uncleared trades are really bad: IFR (free)



  • ISDA Board Member Election: Here
  • Market Agreed Coupon "MAC" Swaps: Here
  • Buy-side to be "cut off" as May 1st deadline approaches: IFR
  • You need foundations to build a regulatory house: Sapient
  • Systemic Issues in a Future World: Sapient
  • Opening speech and address by Ng Nam Sin of the MAS: MAS
  • Ice Cream or Not Ice Cream: FT coverage

Tweets from Jeremy Grant:

  • ISDA Singapore meeting: SwapClear provided loads of cushions at the event which everyone is stealing. Ian Axe: ok with that?
  • ISDA Singapore: the SwapClear cushions are from Ikea. Nice. Reference to collateral cushion? No? Ok. Just a thought
  • My Singapore cab driver: "Your name, Grant like Hugh Grant, Jeremy like Jeremy Irons?". Up to a point, yes
  • Those of you lining up for coffee 1st day of ISDA S'pore: the gushing paid advertorial in Wall St Jnl has Singapore placed where Jakarta is

The views you didn't see

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Thanks Bill for gathering this together - handy.What's news to me is that the EU has passed the exemption of corporates and sovereigns and pension funds from Basel III CVA charge (mentioned in the fragmentation article). Two points of concern:1. I believe banks have more current and future exposure net of collateral facing those counterparties than the open notionals of less than 10% of the total would imply. I'd guess it's more like 25-40% of all their OTC counterparty PFE and this will remain unmitigated by bilateral IM and clearing and not additionally capitalized (though Basel II IMM-based RWAs still apply). 2. This seems to concentrate the pro-cyclical connectivity between sovereigns and banks. So when a sovereign is downgraded not only will its domestic banks be stretched because of the need to put up additional collateral where they used their countries government bonds, but a bigger and bigger slice of their PFE will be to the sovereigns over time. So rating agencies now have two reasons to down grade the domestic banks instead of one when their country's sovereign is downgraded. And where has the greatest sovereign debt issue been recently? Ah yes it's the EU!

Reblogged this on Carl A R Weir's Blog.

across the rest of the financial markets, according to TJ Lim, global head of markets at UniCredit. http://www.ifrasia.com/derivatives-ftt-could-kill-europes-otc-market-isd...