Template:20 days notice ISDA: Difference between revisions

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 ===“by not more than 20 days’ notice”===
-What is the significance of the ''maximum'' [[Notice - ISDA Provision|notice period]] of '''20 days''' that one may use to close out the {{isdama}}? Poor defaulted Counterparty is in pieces, on its knees, bleeding out, but really, as long as it gets ''some'' notice, does it really care how much? Surely the longer the period, the more hope — the chance remains, perhaps, however remote, that things will come right, your counterparty will see sense, or discover that one compassionate bone in its body and, in a bout of terrifying clemency, change its mind? Why deprive it, and yourself of that option?
+What is the significance of the ''maximum'' [[Notice - ISDA Provision|notice period]] of '''20 days''' that one may use to close out the {{isdama}}? Poor defaulted Counterparty is in pieces, on its knees, bleeding out, but really, as long as it gets ''some'' notice, does it really care how much? Surely, the longer the period, the more hope you have? While the agreement remains in termination but un-terminated, augering into that hole in the ground ''but not there yet'' — the chance remains, however remote, that things will come right; your counterparty will see sense, or unexpectedly discover that one compassionate bone in its body that, until now, has gone wholly unnoticed and, in a cloying bout of clemency, will change its mind and withdraw its notice of termination? Well, a little [[hedge fund]] can dream, can’t it? So why deprive it, and yourself of that option?
-Now, this is deep [[ISDA]] lore. It is of the First {{sex|Men}}<ref>I know, I know — ''or'' women, but that spoils the Game of Thrones reference, you know?</ref>. As such — since they didn’t have a written tradition back then in 1986; legends were passed down orally from father to son and much has been lost to vicissitude and contingency — it is not a subject on which there is much commentary. That dreadful [[FT book about derivatives]] sagely notes that usually notice is given much sooner than 20 days — I mean,. you don’t say — but doesn't give a reason for this curious outer bound. Nor does the User’s Guide to the 2002 {{isdama}}.
+Now, this is deep [[ISDA]] lore. It is of the First {{sex|Men}}<ref>I know, I know — ''or'' women, but that spoils the Game of Thrones reference, you know?</ref>. As such — since they didn’t have a written tradition back in 1986; since legends were passed down orally from father to son<ref>See footnote 1 [[and/or]] get a life.</ref> and much has been lost to vicissitude and contingency — it is not a subject on which there is much commentary: That dreadful [[FT book about derivatives]] sagely notes that, usually, much ''less'' notice is given than 20 days (I mean, you don’t ''say'') but doesn’t give a reason for this curious outer bound in the same way it doesn’t give a reason for much else in the {{isdama}}. Nor for that matter does the User’s Guide to the 2002 {{isdama}}.
 One is just expected to ''know''.
-Well, companions, just now knowing things is not how we contrarians roll. So, in the absence of a credentialised source for the reason, let us speculate.
+Well, companions, just now knowing things is not how we contrarians roll. So, in the absence of a credentialised source for the reason, let us ''speculate''.
 Remember the {{isdama}} was invented by banking folk: people who who view the cosmos chiefly through the prism of [[indebtedness]]<ref>Hence, a {{isdaprov|Cross Default}} clause in the [[ISDA]]. Well — can you think of another reason for it?</ref>. A [[lender]] whose [[borrower]] has defaulted will not dilly dally: she will bang in a default notice and seize whatever assets she can get her hand in poste haste. I lend, you owe. I don’t muck about. Breakage costs on a loan are easy to calculate and they are not especially volatile. The longer i take to terminate my exposure and set about recovering, the larger my exposure is likely to be.