Bis quarterly report 0712 carry trade

Developments in Japan's Economy A. The Standard Scenario for Japan's Economy Japan's economy has remained on a moderate but sustained path of expansion since early

Bis quarterly report 0712 carry trade

NOW, THEREFORE, in consideration of the recitals and the mutual covenants, representations, warranties, conditions and agreements hereunder expressed, Lessor and Lessee hereby agree that the terms of the Sublease are hereby amended and restated in full, as follows: Lessor agrees to lease directly to Lessee, and Lessee agrees to lease directly from Lessor, the equipment the "Equipment" described in the equipment schedule attached hereto as Exhibit A the "Equipment Schedule"subject to the terms and conditions set forth herein and in the Equipment Schedule.

The term of the Lease the "Term" with respect to any item of the Equipment shall be the period specified in the Equipment Schedule. If the Term is extended with respect to any item of Equipment pursuant to the terms hereof, the word "Term" shall be deemed to refer to all extended terms, and all provisions of the Lease shall apply during any extended terms, except as otherwise may be specifically provided in writing.

Payments of Rent shall be in the amounts set forth in, and due in accordance with, the provisions of the Equipment Schedule. Lessee shall have no liability for taxes imposed by the United States of America or any State or political subdivision thereof which are on or measured by the net income of Lessor.

Lessee shall report to the extent that it is legally permissible and pay promptly all other taxes, fees and assessments due, imposed, assessed or levied against any item of Equipment or the purchase, ownership, delivery, leasing, possession, use or operation thereofthis Lease or any rentals or receipts hereunderthe Equipment Schedule, Lessor or Lessee by any foreign, Federal, state or local government or taxing authority during or related to the term of this Lease, including, without limitation, all license and Bis quarterly report 0712 carry trade fees, and all sales, use, personal property, excise, gross receipts, franchise, stamp or other taxes, imposts, duties and charges, together with any penalties, fines or interest thereon all hereinafter called "Taxes".

Lessee shall i reimburse Lessor on an after-tax basisupon receipt of written request for reimbursement for any Taxes charged to or assessed against Lessor; ii on request of Lessor, submit to Lessor written evidence of Lessee's payment of such Taxes, iii on all reports or returns show the ownership of the Equipment in Lessor for personal property tax purposes, but not federal or state tax purposesand iv send a copy thereof to Lessor.

Accordingly, on or prior to January 31,Lessee shall use commercially reasonably efforts to complete such verification and to deliver to Lessor a listing of all Equipment found at a location different than that specified in the Equipment Schedule, showing the current location thereof and giving the name of the owner or landlord of each such premises.

Upon Lessor's request, Lessee promptly will notify Lessor in writing of the location of any Equipment as of the date of such notification. Lessor will keep the Equipment free and clear of liens and encumbrances and claimed by or through Lessor, at Lessor's expense.

Lessee's maintenance programs shall be subject to review and approval by Lessor, not to be unreasonably withheld, conditioned or denied. Lessee shall, if at any time reasonably requested by Lessor, affix in a prominent position on each item of Equipment plates, tags or other identifying labels showing the interest therein of Lessor.

All additions, repairs, parts, supplies, accessories, equipment, and devices furnished, attached or affixed to any item of Equipment which are not readily removable shall be made only in compliance with applicable law, including Internal Revenue Service guidelines, shall be free and clear of all liens, encumbrances or rights of others, and shall become the property of Lessor and part of the Equipment.

Carry trades as a standard trading strategy

Lessee will not, without the prior written consent of Lessor and subject to such conditions as Lessor may impose for its protection, affix or install any item of Equipment to or in any other personal or real property. Lessee shall promptly and fully notify Lessor in writing if any item of Equipment shall be or become worn out, lost, stolen, destroyed, irreparably damaged in the reasonable determination of Lessee, or permanently rendered unfit for use from any cause whatsoever such occurrence being hereinafter called a "Casualty Occurrence".

On the rental payment date next succeeding a Casualty Occurrence the "Payment Date"Lessee shall pay Lessor the sum of x the Stipulated Loss Value of such Equipment calculated in accordance with Annex B to the Equipment Schedule as of the rental payment date next preceding such Casualty Occurrence "Calculation Date" and y all rental and other amounts which are due hereunder as to such item of Equipment as of the Payment Date.

Lessee hereby assumes and shall bear the entire risk of any loss, theft, damage to, or destruction of, any item of Equipment from any cause whatsoever from the Effective Date.

Lessee agrees, at its own expense, to keep all Equipment insured for such amounts as specified in the Equipment Schedule and against such hazards as Lessor reasonably may require, including, but not limited to, insurance for damage to or loss of such Equipment and liability coverage for personal injuries, death or property damage arising out of or in connection with the use of such Equipment, with Lessor named as additional insured and with a loss payable clause in favor of Lessor with respect to all fire and casualty policies, irrespective of any breach of warranty or other act or omission of Lessee.

All such policies shall be with companies, and on terms, reasonably satisfactory to Lessor. Lessee agrees to deliver to Lessor evidence of insurance reasonably satisfactory to Lessor.

No insurance shall be subject to any co-insurance clause. Lessee hereby appoints Lessor as Lessee's attorney-in-fact to make proof of loss and claim for insurance, and to make adjustments with insurers and to receive payment of and execute or endorse all documents, checks or drafts in connection with payments made as a result of the fire and casualty insurance policies.

Any expense of Lessor in adjusting or collecting insurance shall be borne by Lessee. Said policies shall provide that the insurance may not be altered or canceled by the insurer until after thirty 30 days' written notice to Lessor. Lessor may, at its option, apply proceeds of the fire and casualty insurance, in whole or in part, to i repair or replace Equipment or any portion thereof, or ii satisfy any obligation of Lessee to Lessor hereunder.

Lessor may terminate such continued leasehold interest upon ten 10 days' notice to Lessee. In addition to these Rents, Lessor shall have all of its other rights and remedies available as a result of this non-performance.

Lessee hereby authorizes Lessor to enter, with or without legal process, any premises where any item of Equipment is located and take possession thereof.

Lessee shall, without further demand, forthwith pay to Lessor i as liquidated damages for loss of a bargain and not as a penalty, the Stipulated Loss Value of the Equipment calculated in accordance with Annex B to the Equipment Schedule as of the Rent Payment date next preceding the declaration of defaultand ii all accrued and unpaid Rent and other sums then due hereunder.

Lessor may, but shall not be required to, sell the Equipment at private or public sale, in bulk or in parcels, with or without notice, and without having the Equipment present at the place of sale; or Lessor may, but shall not be required to, lease, otherwise dispose of or keep idle all or part of the Equipment; and Lessor may use Lessee's premises for any or all of the foregoing without liability for rent, costs, damages or otherwise.

The proceeds of sale, lease or other disposition, if any, shall be applied in the following order of priorities: Lessee shall pay any deficiency in clauses 1 and 2 forthwith. Lessee waives notice of sale or other disposition and the time and place thereofand the manner and place of any advertising.

If permitted by law, Lessee shall pay reasonable attorney's fees actually incurred by Lessor in enforcing the provisions of this Lease and any ancillary documents. Waiver of any Default shall not be a waiver of any other or subsequent default.On balance, our analysis of carry trades involving target currencies in Asia and the Pacific does indeed show that the perceived risks of carry trading would be captured well by focusing on downside risk.

Carry Trades and Currency Crashes Markus K. Brunnermeier, Princeton University, NBER, and CEPR Stefan Nagel, Stanford University and NBER Lasse H.

Bis quarterly report 0712 carry trade

Pedersen, New York University, NBER, and CEPR I. Introduction This paper studies crash risk of currencies for funding‐constrained speculators in an attempt to shed new light on the major currency puzzles.

The performance of NDF carry trades.


Author links open overlay panel John A Menkhoff et al. () report that carry trade portfolios in developed countries are more profitable in the s and s, while carry trade portfolios of emerging market currencies begin outperforming BIS Quarterly Review (March ), pp.

According to studies at the Bank for International Settlements upper, and Galati et al.., ), hedge funds have been the main players and the main beneficiaries of trades using the yen and Swiss franc as funding currencies for buying assets in some of the countries mentioned above.

Galati G, A Heath and P McGuire (), ‘Evidence of Carry Trade Activity’, BIS Quarterly Review, September, pp 27– IMF (International Monetary Fund) (), Annual Report on Exchange Arrangements and Exchange Restrictions, IMF Publication Services, Washington DC.

The current turmoilthat originated in the United States sub-prime credit market can affect carry tradeoperations and be amplified by sudden carry trade unwinding (annex E showsexamples of carry trade unwinding)

Bis quarterly report 0712 carry trade
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