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)
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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.