ISDA PRESS REPORT - TUESDAY,  NOVEMBER 7, 2000

* Tax Change to Boost Danish Derivatives Market
* ISDA plans restructuring info session.
* ECB intervention fails to bolster euro
* Corporates Caught Napping As Deadline For FAS133 looms.
* Derivatives traders at JP Morgan are delighted...

Derivatives Week - November 6, 2000
Tax Change to Boost Danish Derivatives Market

A change in Danish tax law that is expected to be passed this month should
lead to a surge in derivatives use among pension funds and life insurance
companies.  Jens Kristensen, head of the financial division at the Danish
Ministry of Economic Affairs in Copenhagen, said the tax rates for all the
gains on investments for pension funds and life insurance companies are
being equalized, at 15%.  Previously, there were tax incentives to investing
in cash equities-gains on equity positions were taxed at 5%.  The flip side
of this was that non-equity investments, including, hedging, were taxed at a
much higher rate - 26% - and losses on cash investments were not offsettable
against gains on hedges.

Clause Stampe, chief investment officer at pension fund Laegernes
Pensionskasse in Copenhagen, said it plans to increase its use of
derivatives because of the taxation change.  It will use more derivatives to
hedge all of its non-euro and non-krone denominated fixed income portfolio
and its equity portfolio where it feels there is currency risk.  About 10%
of the funds DKK35 billion (USD4 billion) portfolio is in non-euro or
krone-denominated fixed income products.  The pension fund already
occasionally uses foreign exchange swaps and options to hedge equity
investments, but not fixed income products.  Stampe said he envisages its
use of derivatives to hedge equity would increase slightly, but said it was
too early to estimate by how much.

Pensionskassen for jusristernes og okonomernes, a pension fund, is going to
start using derivatives, according to Jesper Jakobsen, strategist and head
of asset allocation in Copenhagen.  He said it was too early to tell exactly
what strategies it will pursue but he envisages the fund will use
derivatives for hedging all asset classes because of the change in tax law.

Previously, there was a lower tax for equity to encourage Danish pension
funds and life insurance companies to invest in local equities.  With global
capital increasingly dominating the local equity market, local institutional
investors are no long required to maintain liquidity on the Danish stock
market.

Derivatives Week - November 6, 2000
ISDA plans restructuring info session.

The International Swaps ant Derivatives Association is holding a meeting in
the next two weeks to discuss  restructuring as a credit event. Credit
derivatives players recently were at loggerheads regarding whether
restructuring should be listed as a credit event under the standard terms of
single-name credit default swaps (DW, 10/9). A group of dealers in New York
elected last month to stop including restructuring as a credit event when
quoting prices for standard single-name credit default swaps. Restructuring
as a credit event will still be available as a menu choice on the ISDA
confirm, ant will not be removed from the 1999 ISDA definitions.

According to Bob Pickel, general counsel at ISDA in New York, dealers and
end users have had numerous
questions regarding the decision, and ISDA's credit derivatives
documentation task force is providing a forum for those questions to be
answered.

Some dealers reported a slowdown in the credit default swap market following
the decision. Others said that they saw no slowdown in their trading
activity, and noted that even if there was a slowdown, it cannot be linked
to the decision. Cash markets remain volatile, and there has been little in
the way of new bond issuance or loan activity recently, they added.

Pickel emphasized that the main point of the meetings is to allow
participants to provide information, rather than provide a forum for debate.
Because this is a market practice issue, it is not up to ISDA to rule how
parties should trade. Meetings will be held concurrently in New York and
London, with a brief conference call joining both of the meetings. The
meeting is open to all ISDA members.

Separately, ISDA is planning to complete its strategic documentation review
by year-end.

Financial Times - November 7, 2000
ECB intervention fails to bolster euro
By Christopher Swan and Adrienne Roberts

The European Central Bank intervened in foreign exchange markets yesterday
for the second consecutive trading day, emphasising its determination to
defend the currency. The unilateral move by the bank initially drove the
single currency almost a cent higher to $0.87. But the impact was
short-lived. The release of figures indicating that growth is slowing both
in the eurozone and in its biggest economy, Germany, pushed the euro back
below the level at which it had started the day. It finished in London at
$0.861, down from its close on Friday. In Birmingham, Romano Prodi,
president of the European Commission, expressed full confidence in Wim
Duisenberg, chairman of the European Central Bank, and insisted that the
euro would recover more ground.

Sales of distressed assets by Japanese banks and other financial
institutions to investors, such as US hedge funds, have unexpectedly slowed
in recent months, bankers and analysts say. The decline is likely to
raise new unease about the health of Japan's financial industry and its slow
progress in cleaning up the problems caused by the collapse of the country's
1980s bubble. Some industry observers suspect that one reason for the
slowdown is that falling Japanese share prices have eroded the banks'
capital - and left them unwilling to make additional provisions for losses.

If the slowdown persists, this could leave some foreign funds and banks
re-examining their attempts to build a distressed-debt business in Japan.
Precise data on the distressed-debt market is not available because it is
one of the most secretive sectors of Japan's financial markets.

Derivatives Week - November 6, 2000
Corporates Caught Napping As Deadline For FAS133 looms.

A raft of corporates have delayed implementing the Financial Accounting
Standards Board's Statement 133, and are scrambling to meet the deadline,
which for most companies is Jan. 1. "The big five have been warning people
for years not to delay in figuring out how to implement FAS 133, but a lot
of people didn't listen," said Rob Royall, partner in the national
accounting group at Ernst & Young in New York. Dilip Kumar, partner at
Arthur Andersen in New York, added that billion-dollar companies have been
laggards in implementing the measure, although he declined to name them.

"We were worried that would happen," said Bob Wilkins, senior project
manager in charge of FAS133 at the accounting standards board in Norwalk,
Conn. He noted that the standard was originally slated to come into effect
for fiscal years beginning after June 15, 1999. Corporations concerned about
digesting the bulky standard while also preparing for Y2K persuaded the FASB
to push the deadline back to fiscal years     beginning after June 15, 2000.
For most companies, that's Jan. 1. "Cynics here said that some companies
would just let the standard sit on their bookshelves for another year," he
added.

The standard itself is daunting, consisting of about 280 pages plus 260
pages of derivatives implementation group interpretations. Ernst & Young's
Royall said the whole document could balloon to 750 pages by a year from now
as hazy parts of the standard are cleared up.

Satish Rishi, v.p. and assistant treasurer at Dell Computer in Austin,
Texas, noted that his company has preparing for some time for the new
standard, and will be ready for it when the deadline arrives. But he noted
that companies that have not planned adequately are reaching a crunch point
now. ZD. U%

AND LAST BUT NOT LEAST.......

The Daily Telegraph - November 7, 2000
Derivatives traders at JP Morgan are delighted...

Derivatives traders at JP Morgan are delighted their bank has been taken
over by Chase Manhattan.  "Hopefully they will sort out the toilets on our
floor," one says.  "There are only four of them, and they never get
cleaned."