The Federal Reserve Bank of New York and dealers will meet next week to discuss operational problems for processing of credit derivatives. The move is a response to a concern among industry participants, regulators and the International Swaps and Derivatives Association, following a warning made in May by U.K. regulator the Financial Services Authority about growing volumes of outstanding confirmations. A range of issues prompted the meeting and a range of topics, including general market practice, business processes and processing of assignment and confirmations, will be discussed, said Peter Bakstandsky, spokesman for the Federal Reserve.
The Federal Reserve sent the invitation to industry regulators, trade associations and 14 investment banks. The letter suggests the dealers send a representative of the firm and risk management area to the meeting, which is scheduled for Sept. 15, Bakstandsky said. The meeting is meant to exchange information useful to participants. The Federal Reserve has no plans to issue a statement with any kind of declaration, he added.
ISDA plans to issue a protocol for assignments with the aim to reduce operational problems (DW, 7/22). Commenting on the upcoming meeting called by the Federal Reserve, Robert Pickel, ceo of ISDA said, "ISDA has put confirmation of assignments front and center of its agenda--its forthcoming protocol goes right to the heart of that issue."
