Mini close-out - GMSLA Provision: Difference between revisions

Mini close-out - GMSLA Provision (view source)

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 {{gmslaanat|9}}
-Mini close-out is the method of terminating an individual {{gmslaprov|Loan}} under a {{gmsla}} or an {{osla}} where there is a settlement failure without actually closing out the whole agreement.
+Mini close-out is the method of terminating an individual {{gmslaprov|Loan}} under a {{gmsla}} or an {{osla}} where there is a settlement failure without actually closing out the whole agreement.  It applies therefore to a failure to ''return'' {{gmslaprov|equivalent}} {{gmslaprov|securities}} or {{gmslaprov|equivalent}} {{gmslaprov|collateral}} — these can be a function of market dislocations, upstream counterparty failures and liquidity events affecting the asset in question, but not to the failure to deliver {{gmslaprov|collateral}} in the first place, seeing as if one kind of {{gmslaprov|collateral}} is not available, it is in the {{gmslaprov|Borrower}}’s gift to deliver something else that meets eligibility criteria, so its failure to pony up collateral always looks like a [[credit]] failure and will count as an {{gmslaprov|Event of Default}}.
 ===[[GMSLA Netting]]===