OTC Derivatives: Should all customized derivatives be standardized?

July 2009
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Point of view: OTC Derivatives: Should all customized derivatives be standardized?

At a glance

PwC's analysis of the effect the credit squeeze and sharp fall-off in first quarter 2009 venture capital investment is having on Clean Technology.

Highlights:

  • Reform efforts are underway to increase oversight of OTC derivatives.
  • OTC derivatives enable businesses to custom-tailor a contract to offset nearly any financial risk exposure.
  • More than 90% of Fortune 500 companies use customized OTC derivatives every day, as do half of midsized firms and thousands of smaller US companies.
  • The market may provide an alternate means of increasing OTC derivative transparency and reducing potential systemic risk.