Template:Specified indebtedness capsule: Difference between revisions

In any case, what should one make of “[[borrowed money]]”? Could it include [[repo]] and [[stock loan]] obligations under [[securities financing transaction]]s? Amounts owed to trade creditors? (In each case no, according to Simon Firth - see [[borrowed money|here]]).

What of a failure to pay an [{csaprov|Independent Amount}}? Technically this is ''not'' a payment of [[indebtedness]], and if the [[IM]] payer is up-to-date on [[variation margin]] payments, there may not be any indebtedness at all. Indeed, once the [[IM]] payer has paid required [[IM]], the [[IM]] ''receiver'' becomes indebted to the ''payer'' for the return of the [[initial margin]] — so while it certainly comprises a [[failure to pay]] when due, the value of the {{{{{1}}}|Specified Indebtedness}} that failure contributes to the {{{{{1}}}|Threshold Amount}} might be nil, or even ''negative''. This, your risk people will say, is why one should widen {{{{{1}}}|Specified Indebtedness}} to include ''all'' payment obligations, but that, for a host of reasons you can find [[Cross Default - ISDA Provision|here]] — is whopping great ''canard a l’orange'' in [[Jolly Contrarian|this old contrarian’s]] opinion.