As policymakers in emerging and frontier markets consider the regulatory framework for financial markets in their jurisdictions, the need for customized risk management tools by market participants remains important.
Market participants use over-the-counter (OTC) derivatives because they are able to customize the terms of their contracts to align more precisely with their specific hedging needs.
With the expansion of central clearing for OTC derivatives, there is a perception that cleared IRD transactions have become standardized, like interest rate futures.
Using data from the Depository Trust & Clearing Corporation, this paper examines the population of cleared fixed-for-floating IRS and demonstrates that cleared products remain highly customizable as compared to futures contracts, enabling buyers and sellers to agree on bespoke terms to better manage the risks to which they are exposed in the normal course of their business operations.
Click on the attached PDF to read the full report.
Documents (1) for Interest Rate Swaps: Cleared and Customized
Latest
ISDA AGM Studio: Emmanuel Geinoz and Eleanor Kelly
Five jurisdictions went live with revised derivatives reporting rules in 2024, with more to follow in 2025 and beyond, putting reporting teams under extreme pressure to implement accurately and on time to avoid regulatory penalties. Emmanuel Geinoz, market infrastructure and...
ISDA AGM Studio: Tyler Wellensiek, Stephen Berger
The first phase of the Securities and Exchange Commission’s Treasury clearing mandate will come into effect in December 2026 – a requirement that will have a significant impact on both US and non-US market participants. Tyler Wellensiek, ISDA board member...
ISDA AGM Studio: Jacques Vigner, BNP Paribas
Jacques Vigner, ISDA board member and chief strategic oversight officer for global markets at BNP Paribas, speaks with Mark Gheerbrant, global head of risk and capital at ISDA, on the key obstacles to a consistent, risk-appropriate capital framework and how to...
ISDA AGM Studio: Future Leaders in Derivatives
Following publication of the latest whitepaper from the ISDA Future Leaders in Derivatives (IFLD) program, Collateral and Liquidity Efficiency in the Derivatives Market: Navigating Risk in a Fragile Ecosystem, Joel Clark talks to IFLD participants Koen Ottenheijm, senior treasury and...