Monetary and Economic Studies Vol.13, No.2 / December 1995

Collateralization of Derivative Transaction in Japan : A Comparison of Two Methods

Tetsuya Sakamoto

This paper discusses the legal issues surrounding collateralization of derivative transactions in Japan. Collateralization is a new financial technique of credit risk management which complements a close-out netting agreement. The author describes two possible methods of collateralization under Japanese law and examines their characteristics.

Keywords: Collateralization; Derivatives; Netting.

Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.

Copyright © 1995 Bank of Japan All Rights Reserved.

Home Japanese Home