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ISDA Documentation for Community Banks

The ISDA has significant credit and liquidity issues for community banks.  Whether you hedge with a Swap Dealer, a regional bank or an Agency, the terms of your ISDA can materially impact the risk profile of your bank.  You must negotiate, don't just sign it!
 
  1. ISDA has over 800 members made up of international banks, investment banks, hedge funds, global law firms and a handful of Fortune 100 multinationals.
  2. Community Banks are not represented among ISDA membership.
  3. The ISDA will impact your bank's liquidity.
  4. ATE's can trigger defaults and collateral calls even if your bank is performing.
  5. IA (or upfront collateral) will impact the cost of a swap - all rates are not equal.
  6. The ISDA can expose your bank to market, credit and liquidity risk.
We negotiate ISDAs for Community Banks.  We evaluate ISDAs and produce an independent analysis of the risks and costs associated with dealer ISDAs.  The PRM ISDA Risk Matrix compares ISDA terms, ranks dealers and can reduce your overall cost of hedging.

Concerned about Repo documentation?  Call us.

FINRA 4210 is delayed but margining is inevitable.....MSFTA documents governing TBA trading should be a documentation priority.  Call to discuss.