teraflop

Citigroup's Derivatives Reduce Bailout to a Non-Event

Notional amounts can be netted under criteria unique to each Citi-counterparty/coun... parent relationship for credit purposes. In other words, if you want to calculate Notional amounts, you need a grid by counterparty, you can't just add them all up. Credit risk is mitigated through collateral postings at inception and ongoing collateral agreements, which should be included in any determination of outstanding credit risk. Additionally, Notional amounts should not be considered when evaluating Delta-one or Flow Risk in a portfolio because of netting agreements or outright additive nature of equivalent positions - they don't equate to market risk. A good article but throwing around Trillions is a good way to scare unsophisticated readers and garner attention.