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Template:M intro isda Party A and Party B: Difference between revisions
Template:M intro isda Party A and Party B (view source)
Revision as of 19:07, 31 January 2024
, 31 January→The arrival of the agents
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But, as long as the customer stays solvent, ''it is not on risk''. | But, as long as the customer stays solvent, ''it is not on risk''. | ||
This | This submerged asymmetry leads to two kinds of bother: first, as noted above, a bit of a squabble about ''labels''. A first-world problem no doubt but, since [[swap dealer]]s set up their templates to assume ''they'' will be Party A and their customers Party B, when immovable object meets irresistible force it can spark an unseemly debate from which the [[dealer]] will quickly back down — ''the customer is always right'' — about who should be who. One of the meeker dealers on the street solved this problem by choosing to be “Party B” as standard. But this only confused customers who were unused to being “Party A”. | ||
Furthermore, when labouring over some neatly [[iatrogenic]] [[co-calculation agent]] fallback dispute mechanism — and be assured, you will spend far more time doing this than can ever be justified by your reward for it, in heaven or on earth — it is easy to get your “[[Party A]]s” and “[[Party B]]s” mixed up. Doing so buries, deep in the [[fossil record]], a technical deficiency that may go unrecognised for ''decades''. | Furthermore, when labouring over some neatly [[iatrogenic]] [[co-calculation agent]] fallback dispute mechanism — and be assured, you will spend far more time doing this than can ever be justified by your reward for it, in heaven or on earth — it is easy to get your “[[Party A]]s” and “[[Party B]]s” mixed up. Doing so buries, deep in the [[fossil record]], a technical deficiency that may go unrecognised for ''decades''. | ||
Roll forward eighteen years. The world is again on the brink of financial [[Apocalypse]], as Slovenian drones overwhelm the port of Stuttgart. The customer — a Slovakian off-balance sheet financing vehicle, is now a [[systemically important financial institution|systemically-important]] leviathan, largely thanks to years of optimistically lax credit sanctioning. But it is teetering. The [[Credit officer|chief credit officer]] runs about with her hair on fire and, for the first time, ''everyone is staring forensically at the docs''. Suddenly that [[co-calculation agent]] fallback dispute mechanism is all that stands between the firm and a three billion dollar abyss. And guess what? ''Some clot transposed “[[Party A]]” and “[[Party B]]”''. | {{Quote|Roll forward eighteen years. The world is again on the brink of financial [[Apocalypse]], as Slovenian drones overwhelm the port of Stuttgart. The customer — a Slovakian off-balance sheet financing vehicle, is now a [[systemically important financial institution|systemically-important]] leviathan, largely thanks to years of optimistically lax credit sanctioning. But it is teetering. The [[Credit officer|chief credit officer]] runs about with her hair on fire and, for the first time, ''everyone is staring forensically at the docs''. Suddenly that [[co-calculation agent]] fallback dispute mechanism is all that stands between the firm and a three billion dollar abyss. And guess what? ''Some clot transposed “[[Party A]]” and “[[Party B]]”''.}} | ||
====The real distinction: [[dealer]] and [[customer]]==== | ====The real distinction: [[dealer]] and [[customer]]==== | ||