Proposals To Suspend Swap Termination Payments!

Backgroung

Earlier this month, Mark Carney, the Governor of the Bank of England together with Dr. Elke König, the President of BaFin, Martin Gruenberg, the Chairman of the US FDIC and Patrick Raaflaub, the CEO of the Swiss Financial Market Supervisory Authority wrote a letter to the International Swaps and Derivatives Association (ISDA) voicing their collective concerns that (notwithstanding numerous regulatory changes) there is still the need to manage systemic risk in the investment banking system.

Although the letter is short in length, its message is strong and has the derivative industry paying close attention. The letter focused on:

"risk of disorderly termination of derivative contacts, particularly in a cross-border resolution context, arising out of...