Statement 2: “The credit risk on currency swaps is bilateral and isolated to the Maple
Leaf-North Bank contracts.”
Statement 2
If Maple Leaf or North Bank defaults to a third party and must declare bankruptcy, the swap
between Maple Leaf and North Bank may also go into default. Hence, the default risk is not
isolated exclusive to the contract written between Maple Leaf and North Bank. However, the
risk is bilateral as either party could end up as the net payer.
However, the
risk is bilateral as either party could end up as the net payer.
这句怎么理解呀？