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Derivatives industry eyes UK Lehman appeal ruling
Key Excerpts from Article on Website of Reuters News Agency
Posted: January 17th, 2012
http://www.reuters.com/article/2011/12/14/britain-derivative...
Regulators and the world's $700 trillion derivatives industry are closely watching a legal battle that began in Britain ... and which will fuel a sea change in swaps payouts. Four cases, including one involving a unit of collapsed U.S. bank Lehman Brothers, are being presented in a five-day hearing at the UK Court of Appeal. All revolve around payouts under the derivatives industry's "master agreement", a framework contract. A bank that trades swaps with another bank typically has one master agreement which sets the terms for millions of transactions between them. The master agreement ... covers around 90 percent of off-exchange derivatives transactions. Under the agreement, Lehman's bankruptcy is considered a default. However, in the four cases before the court this week, the other party in the contracts elected not to terminate them because they would have had to pay out to the defunct bank.
Note: Like most reporting in the major media, this article trivializes the massive size of the derivatives market. $700 trillion is equivalent to $100,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis of just how crazy things have gotten and with some rays of hope by researcher David Wilcock, click here.
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