Template:M summ Credit Derivatives 4.9

Workaday definitions needed for the Credit Events section to work properly. Since the point of the2014 ISDA Credit Derivatives Definitions is to trigger catastrophic,Bankruptcy type events — but arguably trigger them “promptly” as soon as anything looking like it might make a goner of theReference Entity happens — so you havePayment Requirement (the size of a due payment for aFailure to Pay — set by default at USD1m) andDefault Requirement, being the total notional size of obligation you have defaulted on, where the actual failure may be less than theFailure to Pay threshold (and may not be a payment failure at all) — that defaults to USD10m.

Both feel kind of light to us in these modern days where you can be fined ten times that just for not managing your custody records properly, but here we are. You just have to remember to set the thresholds higher.