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Calculation Agent

What is 'Calculation Agent'

An entity that determines the price of an investment product such as a swap. A calculation agent calculates the value of a derivative or the amount owing from each party. The agent also establishes the price for a structured product and may act as its guarantor and issuer. The calculation agent is not a fiduciary, but is expected to avoid conflicts of interest and act in good faith. Its decisions are considered binding. Any disagreement over the calculation agent's decisions must be resolved by a disinterested third-party dealer.

Explaining 'Calculation Agent'

In the credit default swap market, the calculation agent establishes the contract's cash settlement price to give the investors an alternative to a physical settlement. This price will be based on the highest available bids from market makers. The calculation agent, who is typically either the seller or a third party, sometimes takes on a number of other roles in more complex transactions.


Further Reading


Calculating economic life
www.tandfonline.com [PDF]
… labels, the mundane tools and instruments that allow one to calculate and intervene … and an imagined electronic future, the interrelation between devices for calculating the performance … be wary also of assuming or implying that all modes of economic calculation are derivative …

Peripheral vision: Economic markets as calculative collective devicesPeripheral vision: Economic markets as calculative collective devices
journals.sagepub.com [PDF]
… labels, the mundane tools and instruments that allow one to calculate and intervene … and an imagined electronic future, the interrelation between devices for calculating the performance … be wary also of assuming or implying that all modes of economic calculation are derivative …

Heterogeneous agent models in economics and financeHeterogeneous agent models in economics and finance
www.sciencedirect.com [PDF]
… labels, the mundane tools and instruments that allow one to calculate and intervene … and an imagined electronic future, the interrelation between devices for calculating the performance … be wary also of assuming or implying that all modes of economic calculation are derivative …

Calculated affection? Charting the complex economy of home purchaseCalculated affection? Charting the complex economy of home purchase
www.tandfonline.com [PDF]
… labels, the mundane tools and instruments that allow one to calculate and intervene … and an imagined electronic future, the interrelation between devices for calculating the performance … be wary also of assuming or implying that all modes of economic calculation are derivative …

From long-term savings to instant mortgages: financial demonstration and the role of interaction in marketsFrom long-term savings to instant mortgages: financial demonstration and the role of interaction in markets
journals.sagepub.com [PDF]
… labels, the mundane tools and instruments that allow one to calculate and intervene … and an imagined electronic future, the interrelation between devices for calculating the performance … be wary also of assuming or implying that all modes of economic calculation are derivative …


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