82,891
edits
ISDA Comparison: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 5: | Line 5: | ||
The {{2002ma}}, with its {{isdaprov|Close-Out Amount}}, is way simpler than the {{1992ma}} which gets bogged down with all this {{isdaprov|Loss}}, {{isdaprov|Market Quotation}}, {{isdaprov|First Method}}, {{isdaprov|Second Method}} malarkey. | The {{2002ma}}, with its {{isdaprov|Close-Out Amount}}, is way simpler than the {{1992ma}} which gets bogged down with all this {{isdaprov|Loss}}, {{isdaprov|Market Quotation}}, {{isdaprov|First Method}}, {{isdaprov|Second Method}} malarkey. | ||
====Two way payments only==== | ====Two way payments only==== | ||
The {{1992isda}} offered parties the choice between the outrageous one-way payment (the “{{isdaprov|First Method}}”) where only an innocent party could realise its net [[mark-to-market]] gain; and two-way payment (the “{{isdaprov|Second Method}}”) of the {{isdaprov|Settlement Amount}} following early termination, where a {{isdaprov|Non-defaulting Party}} could nonetheless find itself having to pay the {{isdaprov|Defaulting Party}} on close-out under the {{1992isda}}, where it was overall out-of-the-money on its {{isdaprov|Transaction}}s. Seeing as no-one with a functioning frontal lobe would (or, in the ten years of the {{1992ma}}, did) agree to the {{isdaprov|First Method}}, the {{2002isda}} | The {{1992isda}} offered parties the choice between the outrageous one-way payment (the “{{isdaprov|First Method}}”) where only an innocent party could realise its net [[mark-to-market]] gain; and two-way payment (the “{{isdaprov|Second Method}}”) of the {{isdaprov|Settlement Amount}} following early termination, where a {{isdaprov|Non-defaulting Party}} could nonetheless find itself having to pay the {{isdaprov|Defaulting Party}} on close-out under the {{1992isda}}, where it was overall out-of-the-money on its {{isdaprov|Transaction}}s. Seeing as no-one with a functioning frontal lobe would (or, in the ten years of the {{1992ma}}, did) agree to the {{isdaprov|First Method}}, the {{2002isda}} ditched it and provided instead for only two-way payment, under the “{{isdaprov|Close-out Amount}}” concept. Few tears were shed, though the famous transaction manager at a certain US house who, to this day, still insists on the {{1987ma}}, must have bridled a bit. | ||
====Valuation Method==== | ====Valuation Method==== | ||
Likewise, the election of the counter-intuitive and needlessly convoluted {{isdaprov|Loss}}/{{isdaprov|Market Quotation}} methods in the {{1992isda}} has been replaced with a hybrid valuation method called {{isdaprov|Close-Out Amount}}. {{isdaprov|Close-Out Amount}} was established in response to the following concerns: | Likewise, the election of the counter-intuitive and needlessly convoluted {{isdaprov|Loss}}/{{isdaprov|Market Quotation}} methods in the {{1992isda}} has been replaced with a hybrid valuation method called {{isdaprov|Close-Out Amount}}. {{isdaprov|Close-Out Amount}} was established in response to the following concerns: | ||