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{{{{{1}}}Eligible Collateral}} — with or without the (VM) suffix, and finding it tremendously irritating as he does, JC will largely go without — is what is, or is not, acceptable to post under a CSA. In the olden days, this was all a bit fraught and accounted for much of the practical complication of the CSA, and which (in the JC’s eyes) made it a sort of primordial [[smart contract]], long before there were such things as smart contracts. | {{{{{1}}}Eligible Collateral}} — with or without the (VM) suffix, and finding it tremendously irritating as he does, JC will largely go without — is what is, or is not, acceptable to post under a CSA. In the olden days, this was all a bit fraught and accounted for much of the practical complication of the CSA, and which (in the JC’s eyes) made it a sort of primordial [[smart contract]], long before there were such things as smart contracts. | ||
First, a terminology check. Bless them the NY CSA and the English law CSA use different labels for essentially the same things: Eligible Credit support (British) is the same idea as Eligible Collateral (American). This appears to be a matter of pure preference and you would like to think the | First, a terminology check. Bless them the NY CSA and the English law CSA use different labels for essentially the same things: Eligible Credit support (British) is the same idea as Eligible Collateral (American). This appears to be a matter of pure preference and you would like to think the [[’squad]]s could have duked it out in the mid-Atlantic in 1995 to something but WE ARE WHERE WE ARE. | ||
In any case, an [[ancient CSA]] governs a deterministic, but nonetheless highly complicated flow of securities and currencies back and forth between counterparties daily, based on the {{{{{1}}}|Exposure}} of their portfolios. (Modern VM CSAs are simpler, as they are cash only). | In any case, an [[ancient CSA]] governs a deterministic, but nonetheless highly complicated flow of securities and currencies back and forth between counterparties daily, based on the {{{{{1}}}|Exposure}} of their portfolios. (Modern VM CSAs are simpler, as they are cash only). |