"This gets everyone on the same page, all trading the same thing," said Stephen O'Connor, ISDA's chairman. That's "better for liquidity, better for compression."
Banks, hedge funds and asset managers are adapting to changes mandated by the Dodd-Frank Act passed by Congress in 2010, including a requirement to process most swaps with a clearinghouse to cut counterparty risk. There were $639 trillion in over-the-counter derivatives contracts outstanding as of June 30, while the notional value of interest-rate swaps totaled $379 trillion, according to the Bank for International Settlements.
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