The International Swaps and Derivatives Association (ISDA) Nov. 12 said its 2014 resolution stay protocol to address the unwinding of failing banks is now “open for adherence” and will go into effect Jan. 1.
Eighteen banks have voluntarily signed on to the resolution protocol, which imposes a stay on cross-default and early termination rights within standard ISDA derivatives contracts between signatory banks 199 DER EE-3, 10/15/14.
According to ISDA, the stay is intended to give regulators time to plan an orderly resolution of a troubled bank and address concerns that some banks are “too-big-to-fail.”
Under standard swap contract terms, ...
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