At its meeting in September 2003, members were briefed on a work plan developed by the Joint Forum to address the FSF’s call for speedy action to close information gaps on CRT. The study will seek to gain a better understanding of the principal participants involved in the CRT market; the main risks incurred by these participants and the risk management practices employed (with a focus on credit and legal risks); how typical transactions are structured and used; as well as supervisory rules and disclosure/ reporting requirements associated with CRT transactions.  The FSF welcomed the work plan and urged that the study give emphasis to issues that could arise from a financial stability perspective. It was hoped that the study would offer practical suggestions to help financial authorities in monitoring market developments.  The FSF looked forward to discuss the results of this study at its next meeting in March 2004.




The FSF was also briefed on the work of the Committee on the Global Financial System (CGFS) on enhancing the collection of aggregate data on CRT. The CGFS endorsed a proposal to expand existing OTC derivatives statistics to cover wholesale market participants’ involvement in some segments of the CRT market. The emphasis would be on credit default swaps (CDSs) given that this instrument constituted a core element of the “new” growing CRT markets. The information to be collected will shed light on the value, character of the risks being transferred and the composition of risk buyers and sellers in the CDS market. The reporting arrangements will be similar to those used in the BIS semi-annual OTC derivatives survey, using the same reporting panel.