NEWS RELEASE
For Immediate Release Wednesday, March 15, 2006
For More Information, Please Contact:
Lauren Dobbs, ISDA Press Office, Singapore, +65 68364766; Lauren@kennedycom.com
Scott Marra, ISDA New York, 212-901-6013, smarra@isda.org
ISDA REPORTS COLLATERAL USE AT $1.439 TRILLION;
PUBLISHES 2006 MARGIN SURVEY
SINGAPORE, WEDNESDAY, MARCH 15, 2006 – Use of collateral in privately negotiated derivatives
transactions and related margined activities continues to grow significantly,
with the amount of collateral in circulation now estimated at $1.439 trillion.
The International Swaps and Derivatives Association today previewed this
headline figure from its 2006 ISDA Margin Survey at its 21st Annual
General Meeting in Singapore. The results of the Survey highlight a 19 percent
increase over the $1.209 trillion of collateral in circulation reported in the
2005 Survey.
“Collateralization of privately negotiated derivatives continues to grow at a sustained, rapid pace,” said Bob Pickel, ISDA’s Executive Director and Chief Executive Officer. “This growth reflects the importance of collateralization as a risk mitigation tool, as well as ISDA’s efforts to enhance the efficiency of the collateralization process and function,” he said.
In the 2006 Margin Survey, respondents reported over 104,954 collateral agreements in place, compared with 70,892 in the 2005 Survey. The survey found that approximately 59 percent of all derivatives transactions, measured either by volume or by exposure, are now covered by collateral, compared to 55 percent in 2005. Of the 112 firms responding to the 2005 ISDA Margin Survey, 80 were banks, 14 were broker-dealers, and the remaining were institutional investors and end users.
ISDA, which represents participants in the privately negotiated derivatives industry, is the largest global financial trade association by number of member firms. ISDA was chartered in 1985, and today has approximately 700 member institutions from 50 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.
® ISDA is a registered trademark of the International Swaps & Derivatives Association, Inc.