Default

From ACT Wiki
Jump to navigationJump to search

1. Borrowing and lending.

Failure by a borrower to pay an instalment of interest or principal in full and on time.


2. Contract.

More broadly, failure to honour the terms of any agreement.

For example, failure to honour the terms of a loan agreement, or an obligation under a futures contract.


3. Borrowing and lending - documentation.

In borrowing and lending, default clauses are the part of the documentation that protect the investor (lender).

Accordingly broadly defined default clauses are incorporated into loan agreements and bond indentures.


Examples of default by a borrower include failure to pay interest or principal on time, and breaching a covenant.

Broad definitions of default in this context are designed to act as early warning indicators of a decline or potential decline in borrowers' credit strength for the benefit of lenders, to give more time to react to reduce or avoid credit losses.

Definitions of default are often a negotiating point between prospective lenders and borrowers.


4. Systems design - behavioural economics - decision making.

'By default', or a 'default position', means a choice or determination that is made, when no other positive decision or initiative has been taken.


Taxation in Qatar
"There are two separate tax regimes in operation in Qatar and an entity is under the remit of only one regime.
By default an entity is under the State of Qatar regime.
Alternatively, an entity is under the remit of the Qatar Financial Centre (QFC) regime if the entity is licensed with the QFC."
Qatar - the Treasurer's Wiki


Another example of a default position is the cognitive status quo bias to favour pre-existing conditions or choices, whatever they are.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Default&oldid=55438’