Big plans for derivatives termination stays – the BoE view

Stays will extend to buy-side, repo, and securities lending, says BoE’s Gracie

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Andrew Gracie, Bank of England

Last year saw a heated debate over attempts to prevent over-the-counter derivatives terminations interfering with the developing mechanics of bank resolution. At issue was the design of a contractual amendment, signed voluntarily by 18 dealers in November, which would be triggered when a bank entered resolution proceedings and temporarily stay the right of surviving counterparties to immediately settle their trades. The same kind of stay will be extended to other market participants this year

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