Template:M summ 2016 NY VM CSA Cash

Lawful currency for the time being...

You have to love, don’t you, the preparedness of ISDA’s crack drafting squad™ to contemplate a world in which the lawful currency of the United States might not be the U.S. dollar, given how sacred the U. S. dollar is to our American friends. This from a place that haven’t changed the fundamental look of the even construction of the dollar bill since it was last designed in 1935.

(That’s when they put the pyramid with the all-seeing eye on it. Nothing to see here, folks.)

Internationality (or not) of NY law CSAs

Now one tres interessant difference between the New York law 1994 NY CSA and the English law 1995 CSA is that the American version only contemplates a single currency. Because there is only one currency right?

This is what it is — to the extent the constituency trading on a NY CSA are US counterparties that will generally be what they want, and even for those who aren’t, that will generally be what they want, or at least are prepared to put up with, but note it in any case. If you are a counterparty who funds in another currency, you might thing about using the 2016 NY VM CSA, which does contemplate multiple currencies — but doesn’t contemplate IM, should you be someone who wants to take non-regulatory initial margin.