Derivatives

What is going on at ISDA, the International Swap and Derivatives Association, guardian of the best interests of the derivative markets for a generation?

ISDA has a proud but little celebrated role building the plumbing of the derivatives markets, designing and negotiating the templates which frame all of the trillions of derivatives which have been at the heart of the financial crisis.  But ISDA has not had a good crisis. Thrust into the spotlight to defend the role of OTC derivatives in the financial crisis, ISDA’s technical experts have found it hard to get traction with legislators looking for quick and easy answers.

A tactical decision not to  bend with the wind of regulatory change has left ISDA defending some positions long abandoned by other derivative believers. Consequently ISDA’s wise and well-informed voice has been much less influential in shaping the post crisis settlement than many of its supporters had hoped.

It is against this background that chairman Eraj Shirvani has asked long time staffer Bob Pickel to make room in the executive suite for a new CEO, industry veteran Conrad Voldstad. The industry needs a strong ISDA, and ISDA needs a stronger management team.

Connie certainly brings vision, determination and experience. This is good news. ISDA knows it needs to reach out beyond its traditional supporters amongst the major derivative dealers to embrace the more nuanced interests of the buy side of the derivative industry. it has made some progress in this respect in recent years. If it is not to be seen as another voice of JP Morgan and Goldman Sachs, Connie will need to continue Bob Pickel’s outreach programme. Crustacea beware.

Related links:

Trading Room FT

How derivatives can survive regulatory change and thrive FT

ISDA queries doubts cast on CDSs FT

Banquo is still an active investor so will declare his financial interest where appropriate in any blog post.

Banquo

This blog is no longer updated but it remains open as an archive.

Banquo has spent more than 20 years in investment banking and the hedge fund industry, splitting his time between London, New York and Geneva.

Why is Banquo anonymous? Because he operates at a senior level across the financial markets, advising and investing, buying and selling, hiring and firing. He's still in the game but if he has a relevant financial interest in the subject of his posts, you'll know about it. Being anonymous keeps things simple. Banquo will never betray a confidence although he is privy to many.

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