Isda AGM: Credit backlogs rise on higher volumes

Despite the efforts of dealers and intermediaries, backlogs in credit derivatives trade processing rose again in 2007, according to an Isda survey released yesterday.

The average backlog of unprocessed credit derivatives trades in 2007 was equal to 6.6 days of business, up from 5.5 days in 2006, the survey found. But significant progress was made in other areas - the rates backlog fell from 14 to 9.9 days and the equity derivatives backlog, highlighted recently as a particular concern, from 21 to 13.3 days. Ninety percent of rates and credit trades were confirmed electronically within a day of the trade, but equity trade confirmations only reached the same level within four days of the trade.

The rise in credit backlogs follows a huge increase in volumes - volumes of credit default swaps (CDSs) traded rose 81% in 2007 to a total notional outstanding of $62.2 trillion, Isda announced in a separate survey yesterday.

Isda chief executive Robert Pickel said the figures could be improved with more automation and standardised documents. "ISDA's efforts to standardise documentation further, together with the industry's commitments to 'onboard' clients to automated platforms, should lead to a drop in these figures over the coming year," he said.

But this would effect some markets more than others. Credit derivatives, thanks to the industry's efforts since the backlog was first identified as a concern in 2005, are already highly automated, with 62% of trades confirmed automatically. There is more room for improvement in equity derivatives, with only 23% electronic confirmation.

See also: Isda AGM: CDS boom continues
Confirmations in the spotlight
Progress made on equity derivatives backlogs
Putting backlogs up front
An unconfirmed success

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here