Credit value adjustment: Difference between revisions
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“But I could ''[[borrow]]'' some [[Money|mo]] —” and here, dear reader, follows a pause. “Oh, hang on. I think I see the problem here.” | “But I could ''[[borrow]]'' some [[Money|mo]] —” and here, dear reader, follows a pause. “Oh, hang on. I think I see the problem here.” | ||
Right. You don’t have any money, so you would have to borrow it. Even if you could find someone prepared to lend to a shortly-to-be-bankrupt company (look, it does happen), it would lend to you ''at your current state of indebtedness''. So you would be | Right. You don’t have any money, so you would have to borrow it. Even if you could find someone prepared to lend to a shortly-to-be-bankrupt company (look, it does happen), it would lend to you ''at your current state of indebtedness''. So you would be extinguishing your apparently “cheap” [[indebtedness]] and replacing it with ''more expensive [[indebtedness]]''. | ||
[[ | Thus: [[credit value adjustment]]s: nonsense on stilts. | ||
{{sa}} | {{sa}} | ||
*[https://ftalphaville.ft.com/2011/10/13/701766/how-one-banks-default-is-the-same-banks-gain/ Lisa Pollack of FT Alphaville in typically sparkling form] | *[https://ftalphaville.ft.com/2011/10/13/701766/how-one-banks-default-is-the-same-banks-gain/ Lisa Pollack of FT Alphaville in typically sparkling form] | ||