Template:M intro isda qualities of a good ISDA: Difference between revisions

{{Quote|Customer shall be obliged forthwith upon demand and from time to time unconditionally to indemnify and hold the Bank harmless, without set-off, limitation or counterclaim, in the event the Bank or its affiliates, agents, nominees or sub-custodians, howsoever described, suffers or incurs, or determines in its absolute discretion that it is or may be likely to suffer or incur any custom, duty, excise, taxation, stamp or withholding, levy or charge of whatever nature, including penalties and charges and legal expenses incurred in respect thereof, with regard to or in respect of any of the Customer’s assets held by or in the name of or in the custody network of the Bank in connection with this Agreement or otherwise.}}

Almost all the tools you need are in the master. It bears repeating that, in these days of daily [[variation margin]], it will be a rare day when your only option to close out a loss-making ISDA will be a [[NAV trigger]] or a [[key person clause]].

 

 

[Another argument against bilateral margin: the customer can always close out a trade: the dealer is not on risk, QED, and will always give a price to exit — the unwind price on its hedge. It is not generally a taxable event for the dealer. Dealers can’t unilaterally terminate customer positions, and even where they can — [[synthetic prime broker]]s generally have the ''right'' to — they generally won’t, without extreme provocation, ''because that would upset the customer''.