The credit support annex (CSA) can carry terms set against the external credit rating of the bank, and those terms are the downgrade triggers. They require the bank to post more collateral, or to pay
In derivative transactions the credit support annex (CSA) sets the terms of the collateral, and it can give the counterparty the right to substitute the collateral it has posted without the consent of
The previous notebook looked at the case where the bank receives variation margin (VM) on the derivative trades. The credit support annex (CSA) requires the exchange of VM in both directions, and the
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