Default Rate - 1992 ISDA Provision
1992 ISDA Master Agreement A Jolly Contrarian owner’s manual™ Default Rate in all its glory
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Overview
Summary
Default interest is one of those perennial things in finance and is generally a rate higher than the implied funding rate for the period and person in question. You might well ask — though one might, as the JC does, struggle heroically to not go there — whether an arbitrary loading on what ought to be a fair estimate of one’s actual carrying cost is not an unenforceable penalty, but hey, everyone does it.
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- The JC’s famous Nutshell™ summary of this clause