83,547
edits
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
||
Line 5: | Line 5: | ||
Is ISDA desperately trying to stay ''relevant''? Recent clumsy land-grabs of [[ICMA]]/[[ISLA]] territory and forays into [[2023 ISDA Digital Asset Transactions Definitions|crypto]] give that impression. In any case, the irony that ISDA’s latest foray into the new normal — “sustainability-linked derivatives” — should so resemble a notorious example of environmental disaster is rich: | Is ISDA desperately trying to stay ''relevant''? Recent clumsy land-grabs of [[ICMA]]/[[ISLA]] territory and forays into [[2023 ISDA Digital Asset Transactions Definitions|crypto]] give that impression. In any case, the irony that ISDA’s latest foray into the new normal — “sustainability-linked derivatives” — should so resemble a notorious example of environmental disaster is rich: | ||
A community of earnest toilers, supposedly there to vouchsafe the community’s onward prosperity, falls into the throes of a voguish collective delusion and sets about a wastes every tree in sight pursuing mad, hypercomplicated and illogical schemes for imaginary investors who no-one has seen, let alone heard expressing demand for such an offering. | |||
Even so this feels like a step further through the looking glass, deeper down the rabbit hole. ISDA’s previous follies at least tried to cater to existing markets and regulatory imperatives, however cack-handedly. Sustainability derivatives are an attempt to create a new one out of — ~cough~ — hot air. | ISDA’s recent missteps Even so this feels like a step further through the looking glass, deeper down the rabbit hole. ISDA’s previous follies at least tried to cater to existing markets and regulatory imperatives, however cack-handedly. Sustainability derivatives are an attempt to create a new one out of — ~cough~ — hot air. | ||
===How they are meant to work=== | ===How they are meant to work=== | ||
If its discussion paper is anything to go by, not even ISDA has a clear idea what a sustainability-linked derivative would look like. Their best suggestion is that it would be some kind of plug-in to a normal swap — say an interest rate swap — containing a ratchet device to adjust the parties’ respectively spreads dependent on their compliance (or not) with certain pre-agreed [[ESG]] [[key performance indicators]]. | If its discussion paper is anything to go by, not even ISDA has a clear idea what a sustainability-linked derivative would look like. Their best suggestion is that it would be some kind of plug-in to a normal swap — say an interest rate swap — containing a ratchet device to adjust the parties’ respectively spreads dependent on their compliance (or not) with certain pre-agreed [[ESG]] [[key performance indicators]]. |