Bilateral netting

Bilateral nettinginfinanceandinvestmentsis a legally enforceable arrangement between abankand acounterpartythat creates a single legal obligation covering all included individualcontracts.This means that a bank’s obligation, in the event of the default orinsolvencyof one of the parties, would be the net sum of all positive and negative fair values of contracts included in the bilateral netting arrangement.^[1]^[2]^[3]^[4]

References[edit]

^Takatoshi Itō; David Fokke Ihno Folkerts-Landau; Marcel Cassard (1996).International Capital Markets; Developments, Prospects, and Key Policy Issues.International Monetary Fund.p. 134.ISBN 9781557756091.
^International Monetary Fund(1992). Robert C. Effros (ed.).Current Legal Issues Affecting Central Banks, Volume V.pp. 72–106.ISBN 9781557756954.
^Nolani T. Traylor; Tamara E. Cross; Nancy Eibeck Robert Pollard; Tamara E. Cross; Nancy Eibeck, Robert Pollard (1997).Payments, Clearance, and Settlement; A Guide to the Systems, Risks, and Issues.United States General Accounting Office.p. 46.ISBN 9780788148422.
^Pietro Veronesi, ed. (2016).Handbook of Fixed-Income Securities.Wiley.p. 345.ISBN 9781118709191.

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[1] Takatoshi Itō; David Fokke Ihno Folkerts-Landau; Marcel Cassard (1996).International Capital Markets; Developments, Prospects, and Key Policy Issues.International Monetary Fund.p. 134.ISBN 9781557756091.

[2] International Monetary Fund(1992). Robert C. Effros (ed.).Current Legal Issues Affecting Central Banks, Volume V.pp. 72–106.ISBN 9781557756954.

[3] Nolani T. Traylor; Tamara E. Cross; Nancy Eibeck Robert Pollard; Tamara E. Cross; Nancy Eibeck, Robert Pollard (1997).Payments, Clearance, and Settlement; A Guide to the Systems, Risks, and Issues.United States General Accounting Office.p. 46.ISBN 9780788148422.

[4] Pietro Veronesi, ed. (2016).Handbook of Fixed-Income Securities.Wiley.p. 345.ISBN 9781118709191.

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