AFR Smart Investor. Investing for Beginners by Joshua Kennon. iShares. Banks brace for derivatives 'big bang' - Apr. 7, 2009. NEW YORK (Fortune) -- One corner of the wild and wooly world of derivatives is about to get a little tamer -- and not a moment too soon for those who fret over the rising cost of bailouts. The banks that handle the bulk of the trading in credit default swaps -- the unregulated contracts whose misuse helped AIG (AIG, Fortune 500) bring about its own demise -- are adopting new trading and settlement rules this week in a shift the industry has labeled the "big bang. " The changes will set new terms for credit default swaps traded on companies in North America, standardize payment schedules, or coupons, and eliminate clauses that would force CDS users to settle trades when a company does a limited restructuring under certain circumstances. Other shifts will streamline the process for settling the swaps in the event of default.
The changes, which are due to take effect Wednesday, will push the market closer to that goal. Even so, it will be some time before the CDS market is all grown up. Australian Bureau of Statistics. Citibank Australia. Commonwealth Securities Ltd. Reserve Bank of Australia. Westpac Internet. Things you should know This information has been prepared by Westpac Banking Corporation ABN 33 007 457 141, AFSL 233714 ('Westpac'). The exchange rates provided are indicative only as at the time and date shown, are subject to market movements and therefore change continuously; they should not be relied upon as an accurate representation of any final pricing. You should contact Westpac for up-to-date pricing prior to dealing. Exchange rates are applicable for transactions up to $25,000 AUD for Overseas Telegraphic Transfers, Foreign Currency Account Transfers, Foreign Cheque Repurchases, and Bank Draft transactions; and for transactions up to $10,000 AUD for Cash/Bank Notes and Travellers Cheques.
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