The ISDA Master Agreement: The Derivatives Risk Management Tool of the 21st Century?

This book provides a critical and evaluative analysis of the ISDA Master Agreement operating architecture. It argues that in principle, the ISDA Master Agreement has come to gain the title of 'The Derivatives Risk Management Tool of the 21st Century". In order to explain and justify this conclusion, the book sets out the aims of risk management in financial markets and over-the-counter derivatives markets. It also examines in detail how the cumulative provisions of the ISDA Master Agreement framework operate in practice, in terms of how they effectively manage and mitigate the legal and financial risks faced by over-the-counter derivatives markets counterparties. The book also examines how the derivatives markets trade organisation, the International Swaps and Derivatives Association, Inc., has continually strived to develop and improve the ISDA Master Agreement operating framework during its tenure. Finally, the book demonstrates how these efforts have significantly contributed to the overall development of over-the-counter derivatives markets, as well as explaining why the ISDA Master Agreement will likely continue to prevail for the foreseeable future.