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Negotiation oubliette: Difference between revisions
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Let’s say your [[credit department]] has it in its head that [[cross default]] is an important protection in a [[Securities financing transaction|securities financing arrangement]]. This is a peculiar view, shared by few in the market and lacking a solid base in common sense, but of such gems of incongruous conviction propel many a livelihood in the Square Mile and we should not gainsay them. They are inexplicable brute facts of the universe, like the cosmological constant or the popularity of golf. | Let’s say your [[credit department]] has it in its head that [[cross default]] is an important protection in a [[Securities financing transaction|securities financing arrangement]]. This is a peculiar view, shared by few in the market and lacking a solid base in common sense, but of such gems of incongruous conviction propel many a livelihood in the Square Mile and we should not gainsay them. They are inexplicable brute facts of the universe, like the cosmological constant or the popularity of golf. | ||
Your [[credit officer]] will say, “well, [[it won’t hurt]] to just ''ask''” for a cross default, but just asking will prompt a discussion the parties needn’t otherwise have had, about the sorts of fantastic calamities that might come about in the possible universes that risk managers visit in their delirious dreams. The hypotheticals thrown into this debate will be as imaginative as they are tendentious: there will be a tangible air of prepostery emanating from either side’s submissions. But such is the path-dependency of negotiation: had no-one started this ball rolling, on a whim, none of imaginative perversity would have been given voice. | Your [[credit officer]] will say, “well, [[it won’t hurt]] to just ''ask''” for a cross default, but just asking will prompt a discussion the parties needn’t otherwise have had, about the sorts of fantastic calamities that might come about in the possible universes that risk managers visit in their delirious dreams. The hypotheticals thrown into this debate will be as imaginative as they are tendentious: there will be a tangible air of prepostery emanating from either side’s submissions. But such is the path-dependency of negotiation: had no-one started this ball rolling, on a whim, none of imaginative perversity would have been given voice. | ||
It might jazz your risk colleagues, and it will doubtless appeal to your own [[Rube Goldberg]]ian instinct — every transactional [[legal eagle]] has | Before you know it, the parties will be reciting the 14 stations of [[set-off]]. Perhaps someone will have the idea of importing some definitions from the {{isdama}}, and from there all hope is lost. There is one way back, an infinite number of ways forward, into the [[abyss]], and [[negotiator]]s have no reverse gear. | ||
It might jazz your risk colleagues, and it will doubtless appeal to your own [[Rube Goldberg]]ian instinct — every transactional [[legal eagle]] has one, however deeply buried, and it will overjoy your opponent [[buyside counsel|legal eagle]]. | |||
As as you descend into the [[abyss]], it will drive your clients up the ''wall''. | |||
{{sa}} | {{sa}} | ||