International Banker: Common Problems, Mutualized Solutions

“To walk onto a modern trading floor is to witness the extraordinary power of technology in changing the way business is conducted. While trades were once struck with esoteric shouts and signals, machines now dominate, with microseconds saved and dollars gained by the smartest systems. Just as smartphones have revolutionized how we communicate and consume information, technology has created unprecedented efficiencies in trading financial instruments. But scratch below the surface, and you’ll find the financial world is not always as automated and efficient as it might appear.

The over-the-counter derivatives market enables governments and companies worldwide to manage their business risks and create greater certainty and stability. Yet, despite its importance, the industry still relies on paper documents, manual pro­cesses and non-standard practices. Unlike on the trading floor, where individual en­tities can yield a competitive advantage by adopting faster and more powerful systems, operational challenges are addressed most effectively when market participants work together to design common solutions.”

ISDA CEO Scott O’Malia wrote an article for the Autumn 2023 edition of International Banker magazine, in which he explores the benefits of mutualized industry solutions to address common challenges in the derivatives market, addressing regulatory initial margin, document negotiation and the physical delivery of critical termination notices.

Click on the PDF below to read the article in full.

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