Market agrees protocol to slow close-out of positions in failing banks

By Hazel Sheffield
13 Oct 2014

A slew of major global banks have agreed to sign a protocol by the International Swaps and Derivatives Association that imposes a stay on cross-default and major termination rights within standard ISDA derivatives contracts if a counterparty defaults.

Goldman Sachs, JPMorgan, Deutsche Bank and BNP Paribas are among the 18 banks to sign the protocol, which updates the existing ISDA Master Agreement to incorporate contractual stays on cross-default rights that apply in the US bankruptcy code and other close-out regimes. This means that adhering ...

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