Template:ISDA transaction and collateral flows: Difference between revisions

Template:ISDA transaction and collateral flows (view source)

72 bytes removed , 3 April 2018

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 I know what you’re thinking. ''Hang on! that means the termination payer pays knowing this will increase its {{isdaprov|Exposure}} for the couple of days it will take for that collateral [[Return Amount (VM) - CSA Provision|return]] to find its way back. That’s '''stupid'''!'' What with the regulators’ obsession minimise systemic counterparty credit risk, wouldn’t it be better to apply some kind of [[Netting of Payments - ISDA Provision|settlement netting]] in anticipation, to keep the credit exposure down?
-Now, dear reader, have you learned nothing? Of course not.  Now there is a burgeoning DTCC product designed to do that — it is in its infancy — but the theory of the ISDA and CSA settlement flows puts egg before chicken and, at the moment, {{isdaprov|Transaction}} flows and [[collateral]] flows tend to be handled by different operational parts of an institution, and their systems don’t talk.
+Now, dear reader, have you learned nothing? It might be better, but that’s not how ISDA documentation rolls. The theory of the ISDA and CSA settlement flows puts egg before chicken and, at the moment, {{isdaprov|Transaction}} flows and [[collateral]] flows tend to be handled by different operations teams, and their systems don’t talk. Currently, the payer of a terminating transaction has its heart in its mouth for a day or so. <br>
-Anyway, currently, the payer of a terminating transaction has its heart in its mouth for a day or so. <br>