Offsetting Under US GAAP and IFRS
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A Conflict of Laws Approach Annelise Riles* American International Group
Managing Regulatory Arbitrage: A Conflict of Laws Approach Annelise Riles* American International Group (AIG). The very name of this multinational insurance company screams out its U.S. connections.1 Yet in 2008, when London traders, within an office of a subsidiary of AIG,2 engaged in trading activities that ultimately drove the parent company to the brink of failure,2 the trading conduct in question was largely beyond the reach of U.S. insurance and finance regulators,3 leaving American taxpayers on the hook for $182 billion.4 * This article was first conceived while I served as a visiting scholar from abroad at the Institute for Monetary and Economic Studies, Bank of Japan, and I thank my hosts there for their many helpful suggestions. For discussions and comments and that substantially improved the piece, I thank Adeno Addis, Minoru Aosaki, Hannah Buxbaum, Michael Campbell, Martin Davies, Masato Dogauchi, Adam Feibelman, Anna Gelpern, Odette Lineau, Ralf Michaels, Hirokazu Miyazaki, Martha Poon, Shu-Yi Oei, and audiences at the Duke Law School (November 2012), the Cornell International Law Journal symposium (March, 2013), the Tulane Law School (January 2014), and the New York University Law School (February 2014). I thank Diana Biller for her research assistance. 1 AIG is incorporated in Delaware and has its principal place of business in New York. DEL. INS. DEP’T, REPORT ON EXAMINATION OF AIG INSURANCE COMPANY 7 (2006), available at http://delawareinsurance.gov/departments/berg/ExamReports/AIGLIFE2006web.pdf; Restated Certificate of Incorporation of Am. Int’l Grp., Inc., State of Delaware Secretary of State (July 13, 2011), available at http://www.aig.com/Chartis/internet/US/en/CertificateofIncorporation_tcm3171-440365.pdf. -
Revised and Restated Memorandum of Law for the International Swaps and Derivatives Association, Inc
REVISED AND RESTATED MEMORANDUM OF LAW FOR THE INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC. Validity and Enforceability under Korean Law of Collateral Arrangements under the ISDA Credit Support Documents September 19, 2016 VALIDITY AND ENFORCEABILITY UNDER KOREAN LAW OF COLLATERAL ARRANGEMENTS UNDER THE ISDA CREDIT SUPPORT DOCUMENTS This revised and restated memorandum of law discusses the validity and enforceability under the laws of the Republic of Korea (“Korea”) of margin or collateral arrangements entered into in connection with a master agreement (a “Master Agreement”)1 published by the International Swaps and Derivatives Association, Inc. (“ISDA”) under one of the following standard form documents published by ISDA: 1. the 1994 ISDA Credit Support Annex governed by New York law (the “1994 NY Annex”); 2. the 1995 ISDA Credit Support Deed governed by English law (the “1995 Deed” and, together with the NY Annex, the “Security Documents”); 3. the 1995 ISDA Credit Support Annex governed by English law (the “1995 Transfer Annex”); and 4. the ISDA Credit Support Annex governed by Korean law (the “Korean Annex” and, together with the Security Documents and the Transfer Annex, the “Credit Support Documents”). In this memorandum: (a) in relation to the Security Documents and the Korean Annex, the term “Security Collateral Provider” shall refer to the Pledgor (under the 1994 NY Annex), the Chargor (under the 1995 Deed) or the Collateral Provider (under the Korean Annex where Pledging Collateral is delivered), as context requires; and (b) “Collateral Provider” means the Security Collateral Provider under a Security Document or the Korean Annex or the Transferor under a Transfer Annex or the Korean Annex (where Lending Collateral is transferred), according to context, in relation to which “Collateral Taker” means the Secured Party or the Transferee, as the case may be. -
The Role of Derivatives in the Financial Crisis
The Role of Derivatives in the Financial Crisis Testimony of Michael Greenberger Law School Professor University of Maryland School of Law Financial Crisis Inquiry Commission Hearing Dirksen Senate Office Building, Room 538 Washington DC Wednesday, June 30, 2010, 9am EDT TABLE OF CONTENTS Page Table of Contents ........................................................................................................................ i Introduction ................................................................................................................................. 1 The History of Derivatives and Derivatives Market Regulation .......................................... 1 The Early Derivatives Market .......................................................................................... 1 The Origins and Purposes of the Commodity Exchange Act ........................................... 1 The Nature of Futures Contracts ..................................................................................... 2 The Contours of the Exchange Trading Requirement...................................................... 2 The Development and Characteristics of Swaps ............................................................. 3 Swaps and the CEA‟s Exchange Trading Requirement ................................................... 4 The Standardization of Swaps Through the ISDA Master Agreement ............................. 5 The CFTC‟s May 1998 Concept Release ......................................................................... 5 Pre-1998 -
REPORT ISDA 2002 MASTER AGREEMENT (FRENCH LAW) Haut Comité Juridique De La Place Financière De Paris
REPORT ISDA 2002 MASTER AGREEMENT (FRENCH LAW) Haut Comité Juridique de la Place Financière de Paris 5 November 2020 9 rue de Valois 75001 Paris - Tél.: 33 (0)1 42 92 20 00 - [email protected] - www.hcjp.fr TABLE OF CONTENTS Acknowledgement ................................................................................................................................4 Introduction ...........................................................................................................................................5 Executive Summary ............................................................................................................................10 I. Legal environment of the French Law Master Agreement .........................................................15 1.1 - General law ...................................................................................................................................15 1.1.1 - Advantages of civil law; a codified and readable law ....................................................15 1.1.2 - Qualities of French contract law: contractual freedom and security ..........................16 1.2 - Special banking and financial law ..............................................................................................17 II. Qualifications frequently expressed against the use of French Law in financial transactions ..........................................................................................................................................21 2.1 - Implementing the French -
The Post-Crisis Corporate CDS Market Nina Boyarchenko, Anna M
FEDERAL RESERVE BANK OF NEW YORK ECONOMIC POLICY REVIEW The Long and Short EPR of It: The Post-Crisis Corporate CDS Market Nina Boyarchenko, Anna M. Costello, and Or Shachar Volume 26, Number 3 June 2020 The Long and Short of It: The Post-Crisis Corporate CDS Market Nina Boyarchenko, Anna M. Costello, and Or Shachar OVERVIEW he credit default swap (CDS) market, which became • Regulatory changes altered Tnotorious in the wake of the 2007–09 financial crisis, is the structure of the credit the third biggest over-the-counter (OTC) derivatives market default swap (CDS) market in the world, with $8 trillion notional value outstanding as following the 2007-09 financial of June 2018 (BIS 2018). Because of the importance of this crisis, with regulatory-imposed reporting requirements market to the world financial system, sweeping regulatory increasing visibility into this changes—meant to address fragilities uncovered during the once opaque market. crisis—were implemented globally in the years following the • The authors use the resulting crisis. These new regulations changed the market’s structure granular supervisory data to and also, through extensive data collection requirements, examine the CDS market and allowed greater visibility into the previously opaque present stylized facts on its bilateral OTC market. In this article, we exploit granular post-crisis evolution across supervisory data to study the properties of exposures types of contracts, counter- parties, and risk exposures. taken through the CDS market to corporate reference They also study institutions’ entities in the United States and Europe, including which choices on whether to partici- institutions use these contracts, what kinds of exposures pate in the four most common they take, when they take them, and what factors influence CDS products.