Banks Back Swaps That Could Help Unwind Too-Big-to-Fail
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Eighteen global banks have agreed to swaps contract changes designed to work with government rules for unwinding failed firms, a step that may help end the view that some financial companies are “too big to fail.”
Counterparties of banks involved in resolution proceedings will delay contract termination rights and collateral demands under the plan announced by the International Swaps and Derivatives Association. The change is intended to give regulators more time to arrange orderly resolutions, ISDA said in a statement released in Washington on Saturday.