G-30 Policy Recommendations(page262-263)Influential publication from derivativesdealers, end users, academics,accountants, and lawyers20 recommendations published in 199311RiskManagementandFinancialInstitutions3e,Chapter12,CopyrightJohnC.Hull2012
G-30 Policy Recommendations (page 262-263) ⚫ Influential publication from derivatives dealers, end users, academics, accountants, and lawyers ⚫ 20 recommendations published in 1993 Risk Management and Financial Institutions 3e, Chapter 12, Copyright © John C. Hull 2012 11
Netting (page 263-265)Netting refers to a clause in derivativesMaster Agreements, which states that if acompany defaults on one transaction itmust default on all transactionsIn 1995 the 1988 accord was modified toallow banks to reduce their creditequivalent totals when bilateral nettingagreements were in placeRiskManagementandFinancialInstitutions3e,Chapter12,CopyrightJohnC.Hull201212
Netting (page 263-265) ⚫ Netting refers to a clause in derivatives Master Agreements, which states that if a company defaults on one transaction it must default on all transactions ⚫ In 1995 the 1988 accord was modified to allow banks to reduce their credit equivalent totals when bilateral netting agreements were in place Risk Management and Financial Institutions 3e, Chapter 12, Copyright © John C. Hull 2012 12