The creation of a standardised document for credit default swaps has moved a step closer after a working group of the International Swaps and Derivatives Association, an industry trade body, agreed measures that would help align the terms of European contracts with those in the US.

Last week's agreement is an important development for the multi-trillion-dollar market, because it irons out some of the discrepancies between US and European contracts that arose after the credit derivatives market applied the so-called "big bang" reforms at the start of this month.