Template:Capsule insolvency termination: Difference between revisions
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Similarly, some bankruptcy regimes may impede a claimant’s normal rights under the master agreement once the game is finally up. These measures are designed to ensure an orderly resolution of the institution, protect other creditors, depositors, and investors who might hold preferred or secured claims So the insolvent entity’s contractual obligations might be suspended. A counterparty might not be allowed to [[close out]] its open transactions. This is lovely for the folk queueing ut they introduce risk to treading counterparties who have not only credit but market risk on the line. It is not a nice feeling to have your transactions suddenly frozen while the market is gyrating like a belly-dancer, and the people who you are trading with wandering around on the pavement outside their office clutching iron mountain boxes. | Similarly, some bankruptcy regimes may impede a claimant’s normal rights under the master agreement once the game is finally up. These measures are designed to ensure an orderly resolution of the institution, protect other creditors, depositors, and investors who might hold preferred or secured claims So the insolvent entity’s contractual obligations might be suspended. A counterparty might not be allowed to [[close out]] its open transactions. This is lovely for the folk queueing ut they introduce risk to treading counterparties who have not only credit but market risk on the line. It is not a nice feeling to have your transactions suddenly frozen while the market is gyrating like a belly-dancer, and the people who you are trading with wandering around on the pavement outside their office clutching iron mountain boxes. | ||
Where these suspension rights stop you quickly closing out and netting your exposures they might mean your netting analysis fails altogether. This gives you real-world, present time problems, since you must hold capital against the gross exposure under the contract. | Where these suspension rights stop you quickly closing out and netting your exposures they might mean your netting analysis fails altogether. This gives you real-world, present time problems, since you must hold capital against the gross exposure under the contract. | ||