Template:M intro csa (VM): Difference between revisions

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Amwelladmin

Bureaucrats, Interface administrators, Administrators

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-This seems to us rather a waste of trees, and printer toner — a commodity literally more expensive per gram than enriched plutonium.
+This seems to us rather a waste of trees, and printer toner — a commodity more expensive per gram than enriched plutonium.
 We are all environmentalists now: are there good grounds for such profligacy? As is usual for the squad’s lexical peccadilloes, the answer is “in theory, yes. In practice — perhaps once upon a time, if you tilt your head and screw your eyes quite tightly.
-Regulatory margin was not something that anyone asked for. The financial services community had it imposed upon it, but the financial regulation community, in a fit of exasperation after the manifold disasters of the [[global financial crisis]], the way a fearsome kindergarten teacher might order a truculent child to the a naughty step or to wear an embarrassing hat for the afternoon.
+Regulatory margin was not something that anyone asked for. The financial services community had it imposed upon it, but the financial regulation community, in a fit of exasperation after the manifold disasters of the [[global financial crisis]], the way a fearsome kindergarten teacher might order a truculent child to the naughty step or to wear an embarrassing hat for the afternoon.
-Said truculent child did as truculent children do: instead of accepting its punishment with grace and understanding and treating it as a learning moment, it did its best to work around it. Swap transactions that were already on foot before commencement of the new regulations were “[[grandfathered]]” and were not, specifically, required to be margined. Certain classes of transaction — not many, in the end — were out of scope for compulsory margin. So the industry prepared for a world where single {{isdama}} might have ''two'' CSAs: a regulatory one for inscope products after the commencement date, and a non-regulatory one for grandfathered products and those out of scope after the commencement date.
+Said truculent child did as truculent children do: instead of accepting its punishment with good grace, understanding it has erred, and treating the whole incident as a teachable moment, it did its best to work around it. Swap transactions that were already on foot before the commencement of the new regulations were “[[grandfathered]]” and were not, specifically, required to be margined. Certain classes of transaction — not many, in the end — were out of scope for compulsory margin. So the industry prepared for a world where single {{isdama}} might have ''two'' CSAs: a regulatory one for in-scope products after the commencement date, and a non-regulatory one for grandfathered products and those out of scope after the commencement date.
+Now running two CSAs on the same ISDA is a ''recipe'' for confusion. The whole point of a CSA is to be a single aggregating force, aggregating and boiling down all these diverse exposures and liabilities to a single number, and now there were two Credit Support Balances, two sets of Credit Support Eligibility Criteria, two Credit Support Balances and so on: in fact, ''twenty'' different defined terms in the {{2016nycsa}} (seventeen in the {{2016csa}}). You can imagine this could become very difficult for the poor bugger in ops that is handling this across 25,000 ISDA arrangements.
+{{icds}} elegant solution was to suffix the regulatory margin versions of these terms with a “(VM)”.