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::(3) procedures in place to ensure that the legal characteristics of netting arrangements are kept under review in the light of possible changes in relevant law. | ::(3) procedures in place to ensure that the legal characteristics of netting arrangements are kept under review in the light of possible changes in relevant law. | ||
Contracts containing walkaway clauses will not be eligible for netting for the purpose of calculating capital requirements pursuant to this Accord. A walkaway clause is a provision which permits a non-defaulting counterparty to make only limited payments, or no payment at all, to the estate of a defaulter, even if the defaulter is a net creditor. | Contracts containing walkaway clauses will not be eligible for netting for the purpose of calculating capital requirements pursuant to this Accord. A walkaway clause is a provision which permits a non-defaulting counterparty to make only limited payments, or no payment at all, to the estate of a defaulter, even if the defaulter is a net creditor. | ||
::— Basel Capital Accord: ''[https://www.bis.org/publ/bcbs18.pdf Treatment of potential exposure for off-balance-sheet items]'', April 1995}}}}The sacred prehistory of “the one agreement to rule them all” — the [[Single Agreement]]; known these days as the {{isdama}} — predates even the [[First Men]] and, yea, even before them, to the black dawn of prehistory when free cash flows were first discovered in the wild and artificially set against each other for pleasing effect by the [[Children of the Forest]]. Swaps were even mentioned in passing in the Old Testament: | |||
{{quote|''But if he be [[out of the money|poorer than thy estimation]], then he shall present himself before the [[calculation agent]], and the [[calculation agent]] shall [[Valuation|value]] him; And if it be a [[physical settlement]], whereof men bring an offering unto the LORD, all that any man giveth of such unto the LORD shall be holy. And if he shall at all [[swap]] [[cashflow]] for [[asset]], yea, or [[asset]] for [[cashflow]], then the [[exchange]] thereof shall be holy.'' | {{quote|''But if he be [[out of the money|poorer than thy estimation]], then he shall present himself before the [[calculation agent]], and the [[calculation agent]] shall [[Valuation|value]] him; And if it be a [[physical settlement]], whereof men bring an offering unto the LORD, all that any man giveth of such unto the LORD shall be holy. And if he shall at all [[swap]] [[cashflow]] for [[asset]], yea, or [[asset]] for [[cashflow]], then the [[exchange]] thereof shall be holy.'' |