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| Since I’m mostly talking out my a** might as well finish my thought.
I remember reading something like this a long time although I know zilch about the banking and the guy who I was reading prbly knew zilch as well.
When big money moves big money, transferring it to another count, hedging some bet, idk what they do but when they do there’s a third party that acts as an intermediary and they facilitate the moving of money. Sometimes they use that money in the overnight window to collect interest on it. Not a very long window but on large enough transactions and sufficient amount of transactions it starts to add up. I would imagine there are other creative ways to make use of the overnight funds too. But what if the counterparty actually is in a lot of trouble but nobody knows? What if you transfer 500 million and the third party goes belly up before 10am. What if they use the money to meet margin and then got stomped out?
“Third Party Counterparty means any counterparty of Borrower or any Subsidiary to a Swap Contract, other than a Swap Lender, which counterparty is approved by all of the Lenders and is a party to an Approved Third Party Intercreditor Agreement.“
Here’s a definition I got off line. I know when it comes to swaps and the like, that seems like big money tactics not stuff for us plebs. My point here is that while counterparty risk doesn’t mean jack **** to any of us, it is a factor when you get up in the big leagues I think. Or at least an on going concern.
Bitcoin essentially eliminated the need for a counterparty when just transacting normal business. Like transferring money.
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Bitcoin question
