3 ms·
It seems like whenever a bank fails, there are custom rules as to what happens made up on the fly. In this case, surprisingly, bondholders were wiped out. Does
by varunjain99 4y ago
It seems like whenever a bank fails, there are custom rules as to what happens made up on the fly. In this case, surprisingly, bondholders were wiped out. Does this have long-term implications on how bankers will act? If so, what?
- s1artibartfast 4y agoI thought so too on my first reading, but it seems like those rules were printed on the bonds they bought, not made up on the Fly
- jldugger 4y agoBond territory is wild lands -- they all have their own legal terms, and are only kind of standard. Some dude gave a talk at Yale's Fincancial Markets course about how he would pour over bonds looking for ones with accelleration clauses, and then find reasons to demand accelleration, with a key example being the options backdating scandal[1] that hit many bay area execs including Steve Jobs. Also: apparently Russia quietly removed some key language about sovereignty into its bonds in 2018[2] _for some reason_. [1]: https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/ https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/ [2]: https://virginialawreview.org/articles/a-silver-lining-to-russias-sanctions-busting-clause/ https://virginialawreview.org/articles/a-silver-lining-to-ru...
- s1artibartfast 4y agoFascinating read regarding the Russian APC clause, thanks.