mathbabe

ISDA, or International Swaps and Derivatives Organization, is an organization which sets the market standards in a bunch of ways for credit default swap (CDS) and other over-the-counter (OTC) derivatives, in particular they legally define CDS and other swaps and have standard forms for other people to use to enter into such contracts. They also have a committee which decides when a CDS has been triggered, which is a big deal with all the Euro debt restructuring that’s happened and will probably continue to happen.

Anyhoo, what I wanted to mention today is their blog. Actually they have two, one for internal blogging about what they’re up to, and the other for responding to media comments about them.

What’s crazy about these blogs is that they’re well written and… funny. Yeah. You wouldn’t expect that from a legal organization which oversees OTC derivatives, but there you have it. Or else, maybe that just means I’m a complete and utter finance nerd.

And they’re also informative. This post talks about their decision to sue the CFTC for some position limits rule they don’t like. One of their arguments is that the CFTC ignored public comments and cost-benefit analysis which would have loosened the rule or argued against them, and they’re hoping that by suing they can at least force the CFTC to explain how they took into account the public comments.

This argument matters to me because I am involved with the Occupy the SEC folk (OMG those guys are relentless) in preparing public comments for the Volcker Rule, and until now I didn’t know what it meant that there will be public comments and someone has to read them. I mean, I still don’t, really, but it is certainly exciting to see if the CFTC’s hand will be forced in this matter.

Their media blog is informative too. This post talks about how misleading some of the media reports were about why MF Global tanked- it was through repos, not OTC derivatives. True! And by the way, also relevant to the Volcker Rule people, since repos are not considered risky trading in the Volcker Rule. Big huge hole! Doesn’t anybody remember the stuff that Lehman was doing near then end with repos? At the very least they are tools of deception, and need to be taken into account.

Obviously everything they say about CDS and the OTC market is pro-them, but that’s okay. They’re at least saying stuff. I’m impressed!