ISDA Analyzes Effect Of Clearing And Compression In Interest Rate Derivatives

ISDA published a research note in which it analyzed interest rate derivatives ("IRD") notional outstanding data that was reported by the Bank for International Settlements. The purpose of ISDA's analysis was to "illuminate market trends."

ISDA highlighted the following findings, among others:

• clearing and compression had an important impact on IRD notional outstanding figures, which is shown by the estimated 67.5% of IRD notional outstanding that was cleared at the end of 2015;
• approximately 98% of IRD notional outstanding that could be cleared was being cleared, which took IRD instruments that were not yet accepted for clearing into account, as well as volume transacted by counterparties that were exempt from mandatory clearing;