Template:M summ 2002 ISDA Specified Indebtedness: Difference between revisions

Jump to navigation Jump to search

Template:M summ 2002 ISDA Specified Indebtedness (view source)

Revision as of 19:00, 19 March 2020

1,503 bytes removed ,  19 March 2020
Replaced content with "{{Specified indebtedness capsule|isdaprov}}"
No edit summary
(Replaced content with "{{Specified indebtedness capsule|isdaprov}}")
Tag: Replaced
Line 1: Line 1:
A simple and innocuous enough provision. Almost redundant — why go to the trouble of defining [[borrowed money]] as another term? (Answer: because some firms, in their wisdom, will wish to change the definition of [[borrowed money]] to include [[derivatives]], other trading exposures, or even any payment obligations of any kind, and for those people, {{isdaprov|Specified Indebtedness}} is a (somewhat) less loaded term.)<ref>By the way, the [[JC]]’s personal view is that one should ''not'' widen the definition beyond the normal conception of “[[borrowed money]]”, and if one is a [[Bank/Credit Institution|bank]], may wish to ''narrow'' it, to exclude [[Deposit|deposits]]. See the article on ISDA’s {{isdaprov|Cross Default}} {{gmslaprov|Event of Default}} for more information.</ref>.
{{Specified indebtedness capsule|isdaprov}}
 
In any case, what should one make of “[[borrowed money]]”? Could it include [[repo]] and [[stock loan]] obligations? Amounts owed to trade creditors? (In each case no, according to Simon Firth - see [[borrowed money|here]])
 
What of a failure to pay [[initial margin]]? Technicallty this is not the IM payer’s indebtedness — indeed when paid, it is the IM receiver’s indebtedness to the IM payer — so while it certainly comprises a failure to pay when due, the value of the {{isdaprov|Specified Indebtedness}} that failure contributes to the {{isdaprov|Threshold Amount}} might be nil, or even ''negative''.
 
See also the clumsier (but materially similar) definition of “{{efetprov|Specified Indebtedness}}” in the {{efetma}}.
Retrieved from "https://jollycontrarian.com/index.php?title=Special:MobileDiff/41885"

Navigation menu