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Isda AGM: Cautious OTC traders increase collateral use

As the credit crisis gathered strength in 2007, dealers became increasingly likely to demand collateral from their counterparties, according to a survey released today by the International Swaps and Derivatives Association.

There is now an estimated $2.1 trillion of collateral in circulation, up 60% from a year ago. Out of all OTC derivatives transactions, 63% are now covered by collateral agreements, up from 59% last year - 78% of collateral offered is cash.

The news marks a significant change from a year ago, when Isda found that collateral requirements were decreasing.

See also: Isda AGM: Collateral requirements decreasing

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