Template:Csa Interest Period comp: Difference between revisions
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Some development from the {{csaprov|OG}} to the {{2016csa}} that came about when {{icds}}, bless them, contrived in Para {{ | Some development from the {{csaprov|OG}} to the {{2016csa}} that came about when {{icds}}, bless them, contrived in Para {{{{{1}}}|5(c)(ii)}} to design an option no-one in their right mind would have wanted, namely to choose between {{{{{1}}}|Interest Transfer}} — in which you can have interest that accrues on your Credit Support Balances periodically paid to you — or {{{{{1}}}|Interest Amount}}, in which interest accruals are added to the {{{{{1}}}|Credit Support Balance}}, effectively folding all that into the weft and warp of daily transfers that you will be making anyway. | ||
To be fair to them, the OG only contemplated transfer of accrued interest, which in the context of a modern, daily margined swap business, is barking mad, so at least having the option to just capitalise interest is better than not having it. | To be fair to them, the OG only contemplated transfer of accrued interest, which in the context of a modern, daily margined swap business, is barking mad, so at least having the option to just capitalise interest is better than not having it. | ||
But better still would be just straight out capitalising interest, with no option to transfer it. Perhaps this is just me. | But better still would be just straight out capitalising interest, with no option to transfer it. Perhaps this is just me. | ||
Latest revision as of 13:55, 27 June 2024
Some development from the OG to the 2016 VM CSA that came about when ISDA’s crack drafting squad™, bless them, contrived in Para {{{{{1}}}|5(c)(ii)}} to design an option no-one in their right mind would have wanted, namely to choose between {{{{{1}}}|Interest Transfer}} — in which you can have interest that accrues on your Credit Support Balances periodically paid to you — or {{{{{1}}}|Interest Amount}}, in which interest accruals are added to the {{{{{1}}}|Credit Support Balance}}, effectively folding all that into the weft and warp of daily transfers that you will be making anyway.
To be fair to them, the OG only contemplated transfer of accrued interest, which in the context of a modern, daily margined swap business, is barking mad, so at least having the option to just capitalise interest is better than not having it.
But better still would be just straight out capitalising interest, with no option to transfer it. Perhaps this is just me.