Isda AGM: Trichet calls for more transparency

Greater transparency is needed in the credit derivatives market to allow risk managers to understand the size, distribution and concentration of risks accumulated by participants, according to Jean-Claude Trichet, president of the European Central Bank.

Speaking at the 22nd International Swaps and Derivatives Association’s annual general meeting in Boston on Wednesday, Trichet said the opacity of the credit derivatives market is cause for concern and could lead to instability in the financial system.

“The complex interaction between cash instruments and credit derivatives has made it increasingly difficult to monitor where different, possibly sizeable, positions are taken and where risks are concentrated,” he said. “It is similarly