And government debt is rising due to overgenerous civil-service pay and benefits (including index-linked pay rises twice a year).
The other party to the swap would receive the same cash flows in reverse, pay the quarterly index return and receive LIBOR plus the spread.
CPDOs get premium income upfront but have to pay out if a company in the index defaults.
An index tracking prices that companies pay for goods jumped up sharply in July, which means inflation is a growing threat.
Or that 30 out of 33 companies included in Germany's Dax stock index don't reveal the pay of individual executives.
The background is that the French newspapers were insisting that Google should pay them for including their pages in the search index results.
Why should a central bank worry about such a broad price index rather than focusing solely on the prices consumers pay?
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In 2013, a 1.7% increase was approved, based on the index, which has been the basis for military pay for the past several years.
But at the same time there are some people who say that consumer price index does not fairly represent what people have to pay for things.
This has coincided with a quadrupling in top executives' pay, whereas company share prices as measured by the FTSE100 index have gone nowhere and average earnings for the rest of us have increased just a few percentage points a year.
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The wider Retail Prices Index measure of inflation - the one used for many pay negotiations - is already at 4.3%.
At 12 companies in the Russell 3000 stock index, a majority of voting investors have recommended against pay plans this year, according to Institutional Shareholder Services, a proxy advisory firm.
"Workers are being asked to work a little bit longer and to pay a bit more but they will be guaranteed a pension which is index-linked and inflation proof, " she said.
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They pay a fixed rate (currently 3.3%) above the inflation index.
Secretary of Defense Leon Panetta will also ask Congress to limit next year's military pay increase to just 1%, even though the Labor Department's expected Employment Cost index for 2014 is higher.
This may be, the authors say, because relative pay levels are unlikely to have changed enough even over a dozen years to show up on an index of corruption that is broad and subjective to begin with.
Though median pay is expected to increase by 3% in 2012, when you factor in inflation (the consumer price index is growing at 3.6%), expect a reduction in compensation for most employees.
The relationship is strong enough, Ms Van Rijckeghem and Ms Weder reckon, to suggest that raising average civil-service pay from 100% to 200% of the manufacturing wage reduces corruption by about one unit in the corruption index.
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