Bloomberg News

Collateral Protects 84 Percent of OTC Derivatives, ISDA Says

May 01, 2012

The percentage of private derivatives trades protected by collateral in the $708 trillion market rose to 84 percent, according to the International Swaps and Derivatives Association.

That’s up from 80 percent of trades that were backed by cash or other assets in last year’s study, New York-based ISDA said in a statement today. About $3.6 trillion in collateral backed trades in the market at the end of 2011, up from $2.9 trillion a year earlier, ISDA said.

“As the survey clearly demonstrates, collateralization remains among the most widely used methods to mitigate counterparty credit risk in the OTC derivatives market,” Robert Pickel, chief executive officer of ISDA, said in the statement.

About 76 percent of the collateral is in cash, with the remainder in government securities or other assets, ISDA said.

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.


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