NEWS RELEASE
For Immediate Release
ISDA Statement on Negative Interest Rates and the ISDA 2014 Collateral Agreement Negative Interest Protocol
NEW YORK, March 12, 2015 – The International Swaps and Derivatives Association, Inc. (ISDA) today published the following statement regarding negative interest rates and the ISDA 2014 Collateral Agreement Negative Interest Protocol:
Negative interest rates have become increasingly common in the current environment. The ISDA Board strongly supports the use of market rates, whether positive or negative, for over-the-counter derivatives transactions, reflecting best practice in broader financial markets.
ISDA has taken a leading role in addressing negative interest rates to ensure economic consistency with wholesale funding markets and cleared over-the-counter derivatives. Any lack of consistency may have a detrimental effect on market price transparency, and derivatives market liquidity may be adversely affected.
For this reason, ISDA welcomes the fact that more than 220 legal entities from both the dealer and end-user communities have now signed the ISDA 2014 Collateral Agreement Negative Interest Protocol. The Protocol, published in May 2014, was designed to provide certainty about how the payment of interest on posted collateral is calculated in a negative interest rate environment under ISDA collateral documentation. It enables parties to amend the terms of certain ISDA-published collateral agreements to account for negative interest amounts on cash collateral.
For Press Queries, Please Contact:
Lauren Dobbs, ISDA New York, +1 212 901 6019, ldobbs@isda.org
Nick Sawyer, ISDA London, +44 203 088 3586, nsawyer@isda.org
Donna Chan, ISDA Hong Kong, +852 2200 5906, dchan@isda.org
About ISDA
Since 1985, ISDA has worked to make the global over-the-counter (OTC) derivatives markets safer and more efficient. Today, ISDA has over 800 member institutions from 67 countries. These members include a broad range of OTC derivatives market participants including corporations, investment managers, government and supranational entities, insurance companies, energy and commodities firms, and international and regional banks. In addition to market participants, members also include key components of the derivatives market infrastructure including exchanges, clearinghouses and repositories, as well as law firms, accounting firms and other service providers. Information about ISDA and its activities is available on the Association’s web site: www.isda.org.
Documents (1) for ISDA Statement on Negative Interest Rates and the ISDA 2014 Collateral Agreement Negative Interest Protocol
Latest
Conference Delegate Competition Policy
Delegates must at all times be mindful of and comply with their responsibilities under competition law whilst travelling to and from and attending any ISDA conference. In particular, delegates must not discuss or disclose any commercially sensitive information (including details...
SwapsInfo Expands to Include European CDS Activity
ISDA has expanded its SwapsInfo derivatives database and website to include European credit default swaps (CDS) trading activity, creating a more comprehensive picture of derivatives trading in the EU, UK and US. The new data includes EU and UK index...
Credit Derivatives Trading in EU, UK and US
ISDA is expanding its SwapsInfo dataset to include European credit derivatives trading activity, complementing existing research on credit default swaps (CDS) trading in the US. This addition provides a more comprehensive view of global market trends, offering valuable insights into...
ISDA Submits Paper on OTC Derivatives Identifier
On March 11, ISDA submitted a paper to the European Securities and Markets Authority (ESMA) setting out its view on how the delegated act specifying the identifying reference data to be used for over-the-counter (OTC) derivatives transparency under the Markets...