Each time a financial institution issued a swap, it charged the customer a commission.
Interest-rate swap agreements are essentially financial bets many states and cities made in recent years in the hope of protecting themselves from higher rates.
During the financial crisis, the credit default swap (CDS) market, a part of the OTC derivatives market, took center stage as difficulties in financial markets began to intensify and the counterparty risk involved in a largely bilaterally cleared market became apparent.
But, at minimum you must recognize that you are arguing that the US government enter into an interest rate swap with the Global Financial system because you that your intuition about the path of interest rates is superior to that of the Global Bond Market.
He decided to short the mortgage market, using a financial tool known as the credit-default swap, or C.
Duffield and Bhusri believe that since most budgets are devoted largely to paying employees, Workday's people-tracking software will do financial tasks even if customers don't swap out old systems.
According to Reuters, the two-year U.S. interest rate swap spread--a gauge of financial system stress--was quoted at a record high 166.5 basis points in Asia, suggesting that concern about defaults among banking counterparties were worsening.
Swap spreads have become a key barometer of financial health.
The Federal Reserve, the European Central Bank (ECB) and the Bank of England all rejected Iceland's requests, stating, according to the Central Bank of Iceland, that the Icelandic financial system was too large relative to the size of the economy for plausible swap lines to be effective.
Imagine if rather than developing the next CDO or Credit Default Swap instrument, they developed a model that optimized health rather than devastated the economy with financial instruments few can understand.
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Brazil's Central Bank governor Alexandre Tombini said the swap agreement would ensure that trade volumes between the two nations did not suffer if a financial crisis in the future hurt global liquidity.
All this high-flying adventure--plus some bad bets on Harvard's part in the interest-rate swap market that had apparently been the brainchild of former university president Lawrence Summers--created a perfect financial storm.
To make a legal case against Winnick, prosecutors will have to show that he knew that the swap transactions lacked an economic basis and were used to paint a false picture of the company's financial situation.
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