Chatham Financial Launches OTC Derivatives Web Service

Interest rate and currency risk management consultant Chatham Financial has launched as a service to clients and business end users of over-the-counter (OTC) derivatives as part of an overall initiative to build awareness and better understanding of OTC derivatives legislative developments and their implications for business users.

Mike Bontrager, founder and CEO of Chatham Financial, said: “We support the four objectives for legislative reform that were identified by Treasury Secretary Timothy Geithner, but the ramifications for many business users of currently proposed legislation could be profound; many users are only beginning to understand the implications and costs. One-size-fits all legislation is risky. If new legislation doesn’t recognise the differences between users, the responsible businesses that use OTC derivatives to mitigate everyday interest rate, foreign currency and commodity risk may be burdened with significant incremental costs. In addition there could be major complications with current trades, challenges with accounting hedge effectiveness, and a lack of liquidity in products that could make responsible hedging very expensive or impossible.”

The new website features resources for users to become more informed including a summary of “Nine Consequential Points to Consider for OTC Derivatives Legislation”, “Why Hedging Works”, an interactive blog featuring updates from Capitol Hill, commentary from discussions Chatham and others in the industry are having with Congressional staff and leaders on issues and alternative options, and, most importantly, a chance for business users to make their voices heard on how currently proposed policy could detrimentally impact their business.


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