Delivery obligations to be reciprocal - GMSLA Provision: Difference between revisions

This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty.  

Otherwise a creditworthy {{gmslaprov|Borrower}} would be obliged to redeliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} to a bankrupt {{gmslaprov|Lender}} even though it did not expect to receive its {{gmslaprov|Equivalent}} {{gmslaprov|Collateral}} back, which would prejudice its ability to effect a {{gmslaprov|mini close-out}} and set off its obligation to deliver {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} against that {{gmslaprov|Collateral}} return.