82,883
edits
Archegos: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 105: | Line 105: | ||
{{pb margining capsule}} | {{pb margining capsule}} | ||
[[Legal eagles]] will exercise themselves about what happens if a client asks | [[Legal eagles]] will exercise themselves about what happens if a client draws first and asks to withdraw its excess ''before'' you have had a chance to [[Margin adjustment|adjust]] the margin you require, so it cannot. They will say, “well, this would look bad. Optically, you see. How would you explain that to a judge?” | ||
I’m not so sure it ''would'' look bad. A commercial court would understand it [[Commercial imperative|quite simply]]. ''This is how service contracts work''. It is a relationship business. One keeps one’s powder dry. | I’m not so sure it ''would'' look bad. A commercial court would understand it [[Commercial imperative|quite simply]]. ''This is how service contracts work''. It is a relationship business. One keeps one’s powder dry. | ||
Firstly, we can take it as a given that ''no [[prime broker]] will adjust margins if it thinks it really doesn’t have to'' — why have a difficult conversation now, if things might be better in the morning? If you are running a large excess, generally, you are covered — the security package bites; possession is nine-tenths of the law and, ''In sha’Allah'', things | Firstly, we can take it as a given that ''no [[prime broker]] will adjust margins if it thinks it really doesn’t have to'' — why have a difficult conversation now, if things might be better in the morning? If you are running a large [[Margin excess|excess]], generally, you are covered — the security package bites; possession is nine-tenths of the law and, ''In sha’Allah'', things will look better in the morning. | ||
It is only when the customer wants to ''take away'' that excess that you feel truly at the point of a pitchfork. The answer to the question, “okay so, if the margin was so important why didn’t you ask for it till now?” is easy: “''Because I had it in the bank.''” Who wants, unnecessarily, to upset a [[platinum client]]? | It is only when the customer wants to ''take away'' that excess that you feel truly at the point of a pitchfork. The answer to the question, “okay so, if the margin was so important why didn’t you ask for it till now?” is easy: “''Because I had it in the bank.''” Who wants, unnecessarily, to upset a [[platinum client]] be asking for something they already, in practice hold, albeit gently? | ||
If, and only if — ''when'', that is to say — the client asks for all | If, and only if — ''when'', that is to say — the client asks for all its excess back must we confront our demons and deliver bad news. At that point, I can decide, ''do I blow up my relationship or not?'' Why would I have to do that a moment before I have to? | ||
It may be | CS blew their chance. It may be they didn’t quite realise the moment of Zen that was upon them: if so, this is a different kind failing: of expertise, not commercial management. When you gingerly ask to adjust your margin up and the customer says “leave that with me” and in the same breath asks for all his money back, your defcon alarms should be ''blaring''. | ||
===Formal versus informal systems=== | ===Formal versus informal systems=== | ||