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Template:M intro isda ISDA purpose: Difference between revisions
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→Relationship contract
Amwelladmin (talk | contribs) (Created page with "In this backgrounder the JC will look deeply at what the basic point is of an ISDA Master Agreement. Why can’t you just crack on and trade swaps without all this dusty paperwork? What is wrong with long-form confirmations? This might seem like pocket-calculator stuff to seasoned veterans, but it never hurts to stop and ponder what seems to be the bleeding obvious. The JC encountered his first {{aies}} fully thirty years ago now, and he still found himself discovering...") |
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===== Relationship contract ===== | ===== Relationship contract ===== | ||
It is a relationship | It is a legal agreement governing the general relationship between two parties, dispensing with housekeeping matters like contact details, simplifying and streamlining the transaction process and generally setting parameters within which the parties agree to transact [[from time to time]]. The ISDA does not of itself create any obligations or liabilities, or otherwise commit anyone to any Transaction in particular. It simply provides an architecture: walls within which they may safely play; a roof over their heads under which they may comfortably dance. | ||
In that ISDAs are painful to put in place — if it only takes a couple of months you are doing well — the ISDA is also a [[commitment signal]]: it shows you care enough to engage your [[legal eagles]] in the painstaking process of working up “[[strong docs]]”. | |||
===== Credit risk management===== | ===== Credit risk management===== | ||