WASHINGTON, D.C., July 15th, 2026 - The World Bank Group institutions (IBRD, IDA and IFC) and the International Swaps and Derivatives Association, Inc. (ISDA) today signed a Memorandum of Understanding (MoU) to deepen cooperation in improving access to international derivatives markets as part of efforts to strengthen domestic capital markets across emerging markets and developing economies.
The memorandum formalizes a shared focus on helping developing countries build the financial infrastructure needed to manage risk, attract investment, and finance sustainable growth.
Well-functioning derivatives markets are essential for developing countries to hedge against currency and interest rate risks, access local currency financing, and
integrate more effectively into global capital markets. Derivative markets enable the private sector to mitigate against price volatility in supply chains by locking in prices, enhancing business confidence and supporting job creation.
Many emerging markets currently lack the legal, regulatory, and institutional foundations including close-out netting frameworks and standardized documentation that make these markets viable. A 2023 ISDA survey found 19 out of 44 surveyed emerging and developing economies have restrictions in place limiting the types of participants allowed to use derivatives. The MoU between ISDA and the World Bank Group institutions aims to help close that gap.
The World Bank Group and ISDA will collaborate on policy dialogue, research and capacity building, including workshops, seminars, and training programs on derivatives, risk management, and standard ISDA documentation. The MoU also includes joint research and market analyses; and a commitment to engage with public sector stakeholders on legal and regulatory reform.
"When countries have access to efficient derivatives markets, they can better manage the risks that come with borrowing, investing, and planning for the future," said Jorge Familiar, Vice President and Treasurer of the World Bank Group. "Working with ISDA brings global expertise and standards to the places where they are needed most."
"Derivatives markets play a critical role in enabling firms to manage risk, supporting local currency financing. But robust derivatives markets require strong legal, regulatory and infrastructure foundations to be in place. Through this MoU, ISDA and the World Bank Group can help more countries build those foundations, deepen local capital markets and realize the benefits that effective risk management can bring to financial stability and economic development," said Scott O'Malia, Chief Executive Officer of ISDA.
The MoU reinforces the World Bank Group's long-standing role as a leader in capital markets development and financial risk management for its member countries. The parties will meet periodically to coordinate activities and advance shared objectives under the MoU.
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