ISDA Working To Standardize Collateral Arrangements On Swaps
By Katy Burne
Published November 3 2011 Dow Jones Newswires
The International Swaps and Derivatives Association is working to standardize the collateral arrangements between parties trading off-exchange derivatives, or swaps, in order to simplify how the instruments are valued. Swap users have historically taken advantage of the flexibility offered in the documents governing their trades, for example by retaining the option to deliver the cheapest form of cash and assets backstopping their positions, or to settle in multiple currencies. In some cases that saved them hundreds of millions of dollars.
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