Derivative Contracts

October 28th, 2021

A transaction will not be speculative, and beyond a local authority’s capacity on that account, merely because the value or final outcome is uncertain. A decision to borrow at a floating rate instead of a fixed rate, or vice versa, or to enter into a derivative contract, by way of hedging, is capable of being lawful. See Deutsche Bank v Comune di Busto Arsizio (2021)EWHC 2706 (Comm) at paras 1-3, 84-103, especially 100, 294 and 306.

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