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| Look here to the [[mini-closeout]] provisions, which are designed to cope with exactly this kind of settlement failure. | | Look here to the [[mini-closeout]] provisions, which are designed to cope with exactly this kind of settlement failure. |
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| ===Reciprocal obligations — the stock lender’s Section {{isdaprov|2(a)(iii)}}?===
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| This provision allows a Counterparty to suspend payments or deliveries pending satisfactory arrangements where it is concerned as to the creditworthiness of its counterparty. It is a half-arsed version of the {{isdama}}’s feted Section {{isdaprov|2(a)(iii)}}.
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| Otherwise a creditworthy {{pgmslaprov|Borrower}} would be obliged to redeliver {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} to a bankrupt {{pgmslaprov|Lender}} even though it did not expect to receive its {{pgmslaprov|Equivalent}} {{pgmslaprov|Collateral}} back, which would prejudice its ability to effect a {{pgmslaprov|mini close-out}} and set off its obligation to deliver {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} against that {{pgmslaprov|Collateral}} return.
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| It's kind of weird, loosey goosey language:
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| :“If I think you're bust and I don't want to pay, I don't have to, unless I couldn't pay or didn't want to pay, in which case I have to pay.”
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| Consult the [[Mobius loop|circular logicians]] to pick your way out of that one.
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