The world's largest credit derivatives dealers have managed to reduce backlogs of outstanding confirmations by more than 80% on average since last September, says the International Swaps and Derivatives Association (ISDA).
The 14 industry dealers - who were called to a meeting last September in New York by regulators to discuss concerns about back office risk management procedures in the booming credit derivatives markets - have exceeded their June target of a 70% reduction in outstanding confirmations.
Isda says data provided by the dealers to the Federal Reserve Bank of New York "shows a dramatic reduction in backlogs of outstanding confirmations by over 80% on average since September 30 2005".
The dealers have also committed to develop a largely electronic marketplace and create an industry utility trade warehouse. The banks have also agreed to new processing standards for trades that cannot be confirmed electronically and to a new procedure for settling contracts after a credit event, such as a default.