Last week, the Swiss National Bank (SNB) removed the €1.20/CHF peg. This took the FX markets by complete surprise, and caused a dramatic spike in the value of the Swiss Franc.
The full scale of that fallout remains to be seen. Casualties include a major hedge fund which reportedly suffered nearly US$1bn in FX losses. Such heavy losses would almost certainly be linked to derivatives exposures.
Directors of insolvent companies will have obligations to creditors. Creditors may have concerns about exposure and solvency of their trading partners. Handling derivatives contracts can be daunting, and the repercussions are enormous if you get it wrong.
We are providing clients with a concise 10-step practical guide to Closing Out ISDA Contracts. Please note that this guide is for information purposes only, and legal advice should be sought for specific situations.