At the AGM
According to a recent report by ISDA, 87% of nearly 1,200 major companies listed in seven key stock indices use derivatives to help manage their business. At the AGM, ISDA Chair Jeroen Krens highlighted the important role that safe, efficient markets play. Krens noted that corporations, pension funds, insurance companies and others rely on efficient and frictionless access to derivatives to help manage their businesses, and remarked:
Deep and liquid markets mean firms can access derivatives when they want, in the size they want and at a competitive price. Bank intermediaries play a critical role in enabling that. Anything that reduces liquidity – whether it be regulatory changes that go too far in limiting the balance sheet capacity of banks or structural issues that degrade efficiency of access – ultimately hamper the ability of the market to absorb and transfer risk.
Panels at the ISDA AGM also considered the impact of recent market volatility after the introduction and subsequent pause of higher tariffs by the United States. Panellists noted that the "risk-off" reaction of market participants happened quickly but that risk appetite came back, and liquidity was maintained during this period. However, the consensus was that this is just the beginning of the volatility we are going to see, and more volatility is the "new normal".
Baker McKenzie was pleased to once again attend the AGM. A team from across the globe joined, representing our offices in Bangkok, New York and Sydney. Our Bangkok team attended as ISDA Global Opinions Counsel for Thailand jurisdiction.
We provide the team's key insights from the AGM topics and discussions with market participants below.
Click here to read the full alert.
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Bhalarp Vallayapet, Legal Professional, has contributed to this legal update.
