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Credit risk mitigation: Difference between revisions
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These days, [[regulatory margin]] must be calculated and collected daily. True, at the time your counterparty is struggling, the market positions may not move in your favour, so there may be no payments to fail (but by definition you will be structurally over-collateralised in this case). If you had a means of forcing a payment on any day — if you were entitled to raise [[initial margin]], for example — then even this reservation falls away. | These days, [[regulatory margin]] must be calculated and collected daily. True, at the time your counterparty is struggling, the market positions may not move in your favour, so there may be no payments to fail (but by definition you will be structurally over-collateralised in this case). If you had a means of forcing a payment on any day — if you were entitled to raise [[initial margin]], for example — then even this reservation falls away. | ||
{{ | {{sa}} | ||
*{{isdaprov|Events of Default}} — {{isdama}} | *{{isdaprov|Events of Default}} — {{isdama}} | ||
*{{gmslaprov|Events of Default}} — {{gmsla}} | *{{gmslaprov|Events of Default}} — {{gmsla}} | ||
{{ref}} | {{ref}} | ||