If the counterparty cannot meet their obligation you may be unable to collect your rightful payments.
Therefore, all financial institutions are only as strong as their weakest link in counterparty transactions.
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Until the Friday before its bankruptcy, Lehman would have posted collateral, which the counterparty can claim.
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But this introduces significant counterparty risk, without any clear collateral requirement and with no limit on leverage.
No payment will be made unless the payment from the counterparty to the trade is also ready.
Gold, said the WGC, offers portfolio diversification since it lacks the credit and counterparty risk of other investments.
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The financial infrastructure also has important effects on how market participants respond to perceived changes in counterparty risk.
The next step should be the creation of a central counterparty for all securities in all European currencies.
Or at SEC.gov We are the chosen counterparty for small growing entrepreneurial independent business owners across the United States.
Details about the rescue, and the counterparty arrangement, have been slow to emerge.
One major risk (other than the obvious interest rate risk) for swap investors is that of counterparty risk.
At the moment, only Euronext, the merged French, Dutch and Belgian exchange, uses a central counterparty for equity deals.
Perhaps not in some derivatives products, where counterparty risks make an electronic-broking service difficult, but certainly in bond markets.
Such swaps had the university paying a fixed rate to, and simultaneously receiving a variable rate from, a counterparty.
What this creates is chains of counterparty risk, where multiple re-hypothecation borrowers use the same collateral over and over again.
On BlackBerry smartphones equipped with monitoring software, the call to a counterparty also triggers a call to the recording facility.
The second effect relates to deals where Lehman was a counterparty, ie, a buyer or seller of a swaps contract.
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Conversely, the gold standard is based in a non-national asset which is the liability of nobody and bears no counterparty risk.
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And, be aware, the Counterparty in this swap is folks like Goldman Sachs, JP Morgan, Morgan Stanley, and yes Barclay Capital.
Foreign and Chinese firms that wanted to enter joint ventures had no way of gauging the counterparty risk of potential partners.
ETNs represent a general obligation of the issuer (or some other named counterparty) who promises to deliver the return of some index.
Aron was Semgroup's biggest counterparty, trading both physical oil flowing through pipelines and paper oil, in the form of options and futures.
The single standard allows a bank to monitor its counterparty risks globally, streamlines back office processing and reduces costs in data management.
These CDS contracts might be triggered for payouts soon and hopefully the new exchange-clearing operations will protect CDS buyers from counterparty failure.
They also argue that companies using swaps to hedge commercial risks also might not be willing to use a no-name swaps counterparty.
Firms and clearing houses need to look at their complete counterparty risk, and the only way to do that is in real-time.
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The counterparty was the troubled bond insurer ACA Financial Guaranty, which Moody's cut dramatically from A to triple-C one day in December.
Not even American markets have a central counterparty for all financial instruments.
That AIG did not become a financial pariah, was pushed by no disgruntled counterparty into bankruptcy nor bailed out by the U.S. government.
In some cases the participants in the derivative trade have had each other as a counterparty on other trades and thus have reduced their net risk.
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