3 ms·
I'm having a hard time understanding why they could not execute this as a simple loan? Would that not have gotten around the requirements? My reading here is t
by rtpg 10y ago
I'm having a hard time understanding why they could not execute this as a simple loan? Would that not have gotten around the requirements?
My reading here is that the base mechanism of the trade was "DB gives X, receives Y% of X over Z years".
I really wonder what % of transactions are this sort of fee-generating trade
- S4M 10y agoI suppose that with a loan it would be transparent that the money "gained" would have to be repaid later, while in the case of a sure to lose bet, the price of the derivatives could have been tweaked so it would be apparent only later that the money would be lost.
- FabHK 10y agoA loan doesn't change your profit for accounting purposes - you gain $$$ in cash (asset), but have the same $$$ as a loan (liability) on the other side of the balance sheet.