US policymakers are debating whether and how to increase levels of clearing in Treasury securities and repos, as part of a series of measures intended to strengthen the resilience of these markets during periods of stress. Given the central role that US Treasuries play in the financial system, any policy change would reverberate widely and would affect different market segments and participants in different ways. To inform the discussion, ISDA has published the results of a new survey on Treasury clearing, which provides views on possible benefits and costs, necessary changes to clearing infrastructure and the impact on related markets, including derivatives.

Publication of the ISDA survey follows a recent Group-of-30 (G-30) progress report on steps to enhance the resilience and liquidity of the US Treasury markets under stress, which reiterated earlier recommendations for increased clearing. Specifically, it called for all Treasury securities trades executed on...

The idea that dealers and investors should be forced to clear all trades in US Treasury bonds has “very little support” from the industry, according to a survey conducted by the International Swaps and Derivatives Association.

“Our survey shows there’s currently very little consensus on the impact of increased clearing in the US Treasury market, suggesting further research on the costs and benefits is necessary,” noted Isda chief executive Scott O’Malia. “We support the aims of US policymakers

The idea that dealers and investors should be forced to clear all trades in US Treasury bonds has “very little support” from the industry, according to a survey conducted by the International Swaps and Derivatives Association.

“Our survey shows there’s currently very little consensus on the impact of increased clearing in the US Treasury market, suggesting further research on the costs and benefits is necessary,” noted Isda chief executive Scott O’Malia. “We support the aims of US policymakers

Thank you to all of the firms that submitted responses to ISDA’s survey regarding ongoing efforts to incentivize and/or potentially require additional clearing of US Treasury (UST) securities and repos. ISDA has published a report summarizing the results of the survey on an aggregated and anonymized basis.

ISDA’s survey sought feedback on the legal, operational, regulatory (including market regulation and capital implications) and policy issues associated with UST clearing, with a focus on client clearing and how reforms in this market would impact the derivatives markets.  ISDA conducted the survey in response to discussions by policy makers and market participants about the merits of further clearing of US Treasuries and whether this would strengthen the resilience of the market during stress events.

The results of the survey shows there is a wide variety of views on whether increased clearing would materially improve the resilience and efficiency...

ISDA has published the results of a survey on the US Treasury market, which provides views on the potential benefits and costs of increased clearing of cash Treasury securities and repos.

The survey comes in response to discussion by policymakers and market participants about the merits of further clearing of US Treasuries and whether this would strengthen the resilience of the market during stress events. For example, a Group-of-30 (G-30) Working Group on Treasury Market Liquidity has recommended clearing of all Treasury repos, as well as all Treasury securities trades executed on electronic interdealer trading platforms. The G-30 also proposed that regulators and market participants should assess whether and how dealer-to-client cash Treasury trades should be cleared.

The ISDA survey shows there is a wide variety of views on whether increased clearing would materially improve the resilience and efficiency of cash Treasury securities and repos. While most...