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How Negative Interest Rates Affect Commodity Derivatives and Collateral Transactions in the European Market  


Author:  Peter Zaman.; Claude Brown.


Source: Volume 28, Number 06, July/August 2015 , pp.47-51(5)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

Although there is nothing special about rates going into negative territory, in a world accustomed to positive rates, it does require taking a fresh approach to analyzing and managing risk. This article considers the potential impact of negative interest rates on transaction and collateral documentation commonly used in the European commodity derivatives market.

Keywords: negative interest rates, derivative and commodity documentation, margin, collateral, double tax treaties, withholding, gross up provisions

Affiliations:  1: Reed Smith; 2: Reed Smith.

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