Bloomberg News

ISDA to Release Details on Committee’s Credit Swaps Decisions

September 05, 2012

The International Swaps and Derivatives Association will begin publishing details of the committee meetings held by banks and investors that determine when credit-default swaps are triggered.

At the end of each meeting, the New York-based industry and lobbying group will release a statement on the issues considered, any resolution that was reached and the next steps in the process, the group said in a statement today. The regional committees, which in 2009 were given the authority for deciding so-called credit events for the $25 trillion market, have typically only disclosed their voting results without details of the issues discussed.

The changes “are an important step forward in improving the overall transparency” of the determinations committee process, Robert Pickel, ISDA’s chief executive officer, said in the statement.

The committees are divided into five regions and include 12 dealer banks and six asset managers. When a company or country defaults on its debt, an ISDA-sanctioned auction is held to determine the price of the underlying bonds. Sellers of credit swaps tied to that debt then pay the buyer of the contract face value, less the price set at the auction.

The banks with voting power on the committees for all regions are Bank of America Corp. (BAC:US), Barclays Plc (BARC), Citigroup Inc. (C:US), Credit Suisse Group AG (CSGN), Deutsche Bank AG (DBK), Goldman Sachs Group Inc. (GS:US), JPMorgan Chase & Co. (JPM:US), Morgan Stanley (MS:US) and UBS AG, ISDA said in March. Nomura Holdings Inc. acts as a consultant to the group and doesn’t have voting power, ISDA said.

The asset managers with voting rights are Citadel LLC, D.E. Shaw & Co., BlueMountain Capital Management LLC, Pacific Investment Management Co., and Elliot Management Corp., ISDA said. MetLife Inc. (MET:US) is the consultative non-dealer in all regions.

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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Companies Mentioned

  • BAC
    (Bank of America Corp)
    • $16.11 USD
    • 0.10
    • 0.59%
  • C
    (Citigroup Inc)
    • $51.64 USD
    • 0.25
    • 0.48%
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