Bilateral netting in finance and investments is a legally enforceable arrangement between a bank and a counterparty that creates a single legal obligation covering all included individual contracts. This means that a bank’s obligation, in the event of the default or insolvency of 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]

See also

References

  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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