The master agreement also sets forth a template for workout procedures if a counterparty defaults, allowing parties to adjust riskmanagement strategies based on the work-out arrangements. Ultimately, the standardization provided by the master agreement reduces uncertainty about the instruments, lowers transaction costs, and facilitates price discovery and market liquidity.
I can imagine that advice such as this could have been found in the lost Sibylline Books. Again, let us be specific. There are a lot of regulatory target variables which involve the use of complex risk-adjusting methods. For example, the core capital ratio is the ratio of core capital to risk-weighted assets.