UK - Independent pricing and valuations outfit Markit has written to the Pension Protection Fund (PPF) urging it to include credit derivates within its definition of contingent assets.
Markit said that whilst it supported the PPF’s board’s objective of “encouraging positive risk management by employers in relation to their pension schemes,” and agreed that the risk-based levy could play an important role in encouraging the use of contingent assets, Markit felt that credit derivatives should be included.
In the letter to the PPF Tim Barker, executive vice president of Markit, said: “The credit derivatives market has grown tremendously in recent years and is now estimated to be more than $12 trillion in size according to the most recent International Swaps and Derivatives Association (ISDA) survey. As the market has grown in size, it has also matured with the widespread use of industry standard documentation, pioneered by ISDA, increasingly robust operational infrastructures and established processing procedures.”
He said the credit derivatives market was a fast growing, maturing and an integral part of the financial landscape for a wide range of institutions, including pension funds.
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