Events of Default - GMRA Provision: Difference between revisions

It's a similar story under the {{gmsla}} by the way.

Should failure to deliver be an Event of Default under a repo?

Note under both versions, a failure to deliver collateral '''is''' an {{gmraprov|Event of Default}}.  

Delivery failures are frequent in the repo marketand may occur for a number of reasons:

Making them Events of Default would put participants in a perpetual state of default.   

The Events of Default are protections so a non-defaulting party can immediately terminate all outstanding transactions prior to or on the commencement of insolvency proceedings and so end its exposure.  They are not intended for non-insolvency situations where the agreement may have been breached but the creditworthiness of a counterparty is not in question.  In those circumstances, the parties can rely on the normal contractual remedies for breach of contract.