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{{fullanat|gmsla|8.6|2010}} | {{fullanat|gmsla|8.6|2010}} | ||
This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty. | This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty. It is a half-arsed version of the {{isdama}}’s feted Section {{isdaprov|2(a)(iii)}}. | ||
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. | 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. | ||
{{nuts|gmsla|8.6}} | {{nuts|gmsla|8.6}} | ||
It's kind of weird, loosey goosey language. If I think you're bust and I don't want to pay, I don't have to, unless I couldn't pay or didn't want to pay, in which case I have to pay. | |||
Consult the circular logicians to pick your way out of that one. | |||
{{seealso}} | |||
*[[Flawed asset]] | |||
*Section {{isdaprov|2(a)(iii)}} of the {{isdama}} |