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Sure, it is preliminary, preamble stuff, but this goes to the core of what is so ''structurally'' different — economically, they’re meant to be as near as dammit the same — about the {{pgmsla}} when compared with the {{gmsla}}. The {{ | Sure, it is preliminary, preamble stuff, but this goes to the core of what is so ''structurally'' different — economically, they’re meant to be as near as dammit the same — about the {{pgmsla}} when compared with the {{gmsla}}. The {{gmsla}} is a two-way [[title transfer]] agreement, where [[credit risk]] mitigation functions by [[Set-off|offset]], leaving the person who has transferred the greater value of assets (usually, ironically, the {{gmraprov|Borrower}}) with residual credit exposure, for the difference, to the one who has transferred the lesser value — usually the {{gmslaprov|Lender}}, as it will insist on being over-collateralised by way of [[initial margin]]. | ||
The {{pgmsla}}, by contrast, is a conventional secured “{{gmslaprov|Loan}}” where the {{pgmslaprov|Lender}} has [[credit exposure]] to the {{pgmslaprov|Borrower}} for the ''total'' value of the {{pgmslaprov|Loaned Securities}}, but this is collateralised by a [[pledge]] over {{pgmslaprov|Collateral}} to which the {{pgmslaprov|Borrower}} retains legal title. | |||
The reference to a {{pgmslaprov|Nominee}}, we think, is a flag to recognise that the {{pgmsla}} is typically suitable only for [[agency lending]] arrangements, in which the principal {{pgmslaprov|Lender}}s to the {{pgmslaprov|Loan}}s will be wealth-management clients and funds whose assets are managed by an [[agent lender]], abnd who have handed over responsibility for managing their {{pgmslaprov|Loan}}s to the [[agent lender]]. | The reference to a {{pgmslaprov|Nominee}}, we think, is a flag to recognise that the {{pgmsla}} is typically suitable only for [[agency lending]] arrangements, in which the principal {{pgmslaprov|Lender}}s to the {{pgmslaprov|Loan}}s will be wealth-management clients and funds whose assets are managed by an [[agent lender]], abnd who have handed over responsibility for managing their {{pgmslaprov|Loan}}s to the [[agent lender]]. |