Time’s up for UK banks to unwind swaps with VTB
Majority of contracts have been terminated, but laggards face prospect of default
The clock has run down for investment banks operating out of the UK to unwind derivatives positions with Russia’s VTB Bank, leaving those with a rump of outstanding contracts scrambling to avoid default.
A general licence that gave banks governed by UK law 30 days to unwind derivatives in compliance with sanctions expired on March 27. This means UK counterparties that were unable to terminate contracts within the grace period can no longer meet payment obligations on those instruments.
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