What policy changes are needed for the CDS business?
Swap participants have worked closely for more than two decades with financial regulators, legislators, and governments to establish a sound policy framework for swap activity. That framework is a worthy object of study for its successes. It has been designed to retain a great degree of market discipline to guide the conduct of swap participants, and it might be usefully compared with other frameworks, including the framework for housing finance, where the results have been different, as any review of the 21st Century regulatory framework takes place. Further enhancements to the swaps framework, which add to the legal certainty about enforcement of contracts or increase market discipline for swap participants, are likely to improve the conduct of the business. ISDA and the industry recognize that the CDS business today faces significant challenges, and we are urgently moving forward with new solutions. We have delivered and are delivering on a series of reforms in order to promote grea
