NEWS RELEASE
For Immediate Release Wednesday, April 16, 2008
For More Information, Please Contact:
Vienna Press Room: +43 1 71700 12146
ISDA 2008 PRELIMINARY MARGIN SURVEY RESULTS SHOW COLLATERAL
USE AT $2.1 TRILLION;
60 PERCENT INCREASE IN CIRCULATION
The results show an increase of almost 60 percent over the estimated $1.335 trillion of collateral in the 2007 Survey. Cash continues to grow in importance among most firms, and now stands at over 78 percent of collateral received and 83 percent of collateral delivered.
“ISDA’s
2008 Margin Survey reflects continued importance of collateralization as a risk
mitigation tool and the effectiveness of collateral agreements,” said Robert
Pickel, Executive Director and Chief Executive Officer, ISDA.
The 2008 Survey reports that collateral agreements in place grew to over 149,000, of which 74 percent are two-way agreements. Among firms that responded both in 2007 and 2008, collateral agreements grew by 18 percent. Respondents forecast further growth of 20 percent during 2008.
The 2008 Margin Survey also finds that collateral coverage continues to grow, both in terms of trade volume subject to collateral agreements and of credit exposure covered by collateral.
For all over-the-counter derivatives transactions, 63 percent are subject to collateral agreements, compared with 59 percent last year. Furthermore, 65 percent of credit exposure for privately negotiated derivatives is now covered by collateral, compared with 59 percent last year.
Of the 107 firms responding to the 2008 ISDA Margin Survey, 85 are banks or broker-dealers, and the remaining are institutional investors and end users.
About ISDA
ISDA, which represents participants in the privately negotiated derivatives
industry, is among the world’s largest global financial trade associations as
measured by number of member firms. ISDA was chartered in 1985, and today has over
825 member institutions from 55 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.