Compression activity has increased significantly over the past year, driven by new regulations and developments in clearing technology. In particular, the implementation of the Basel III leverage ratio has acted as a major incentive for banks to reduce the size of their legacy derivatives books. Developments in compression services – and especially the unlinking of cleared trades – have helped facilitate increased activity. Total interest rate derivatives notional
outstanding has dropped as a result. This report considers how market participants are using compression technology, and the impact this is having on the interest rate derivatives market.
Documents (1) for The Impact of Compression on the Interest Rate Derivatives Market
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The CPI Quandary
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ISDA Response to HMT, BoE on UK CCPs
On November 18, ISDA submitted its responses to the Bank of England (BoE) consultation on ensuring the resilience of central counterparties (CCPs) and the UK Treasury’s (HMT) two draft CCP statutory instruments (SIs). These consultations form part of the update...
Doubling Down on Appropriate Trading Book Capital
Throughout ISDA’s 40th anniversary year, we’ve been reflecting on the quest for greater consistency and efficiency that underpins everything we’ve achieved since 1985. It was at the heart of the original efforts to bring greater standardization to the nascent derivatives...
Determining Initial Reference Index for New Trades
On November 25, 2025, ISDA published a Market Practice Note (MPN) to recommend a specific methodology that market participants could elect to use for the purposes of determining the Initial Reference Index for certain new inflation derivative transactions given that...