Exact(1)
If, instead, the bank were to post capital as initial margin, then the bank would record a "margin receivable" entry on its balance sheet, which however cannot contribute to capital since this asset is too illiquid and impossible to unwind without unwinding all underlying derivatives.
Similar(7)
The economics underlying derivative products are so novel and significant that four of their innovators have won Nobel prizes".Derivative product" is to "molecule" in general as each of Mr Drucker's favourite financial products (for example, Eurodollars, Eurobonds and credit cards) is to a specific molecule.
On Friday, Mr. Arnault responded to a barrage of questions about his intentions by declaring that LVMH was "surprised" to find itself a large shareholder in Hermès, a position that he said had been "imposed" on LVMH because of conditions underlying the derivatives contracts.
The economic analysis and asset pricing component provides an introduction to the function of markets generally as well as the economic and financial theory that underlies derivatives pricing and hedging.
If other courts followed the ruling, it would mean they would look to see where the security underlying a derivative was based.
Even today no one knows the fair value of the complex derivatives underlying these and related maneuvers, which is exactly the point.
Goldman, however, was also an integral part of a money-hungry Wall Street culture that helped build, oil and maintain the securitization and derivatives machinery underlying the current mortgage-fueled problems.
The interaction between underlying debt and credit derivatives will complicate bankruptcy and near-bankruptcy no end, he says.A big concern for company bosses will be the role of speculative investors, especially hedge funds.
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