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As you work in a bank, and I've been out of direct Wall St. finance for a few years, is there enough money in the entire world to address the swaps market if a
by 6stringmerc 10y ago
As you work in a bank, and I've been out of direct Wall St. finance for a few years, is there enough money in the entire world to address the swaps market if a massive insolvency triggers an messy, imperfect unwinding rather than the "oh everything balances out" claim?
- cm2187 10y agoBut everything nets each other contractually. The gross position of swaps is an intellectual (and accounting) view. The only thing you can make a claim for in a court is the net position because that's your agreement with the counterparty (ISDA). The fact that this net position is calculated from a sum of gross positions doesn't mean you can go to a court with these gross positions. There are some courts that would ignore the contractual agreements. Italy is known for its weird ruling. But I do not believe the gross positions are meaningful.