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Template:20 days notice ISDA: Difference between revisions
→“by not more than 20 days’ notice”
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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, ''en route'' to that crater in the ground ''but not there yet'' — the chance remains, however remote, that things will come right; that ''you'', its counterparty, will see sense, or unexpectedly discover the one compassionate bone in your body that, until now, has gone wholly unnoticed and, in a cloying bout of clemency, will change your mind and withdraw your notice of termination? Well, a little [[hedge fund]] can dream, can’t it? So 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, ''en route'' to that crater in the ground ''but not there yet'' — the chance remains, however remote, that things will come right; that ''you'', its counterparty, will see sense, or unexpectedly discover the one compassionate bone in your body that, until now, has gone wholly unnoticed and, in a cloying bout of clemency, will change your mind and withdraw your 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 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}}. | 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}} despite costing a monkey and that being its express purpose. Nor for that matter does the official ISDA User’s Guide to the 2002 {{isdama}}. | ||
One is just expected to ''know''. | One is just expected to ''know''. Yet, in point of fact, no-one seems to. | ||
Well, companions, just | Well, companions, just not knowing things is not how we contrarians roll. So, in the absence of a credentialised, plausible 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. | 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. | ||