Risk corporate survey 2010

Price is still the most important factor for corporates when choosing which dealer to trade with. However, a wide divergence in pricing among banks means transparency is now a key issue. By Matt Cameron, with additional research by Alexander Campbell, Joel Clark, Peter Madigan, Ana Mendes, Mark Pengelly, Christopher Whittall and Duncan Wood

clive-banks

Putting on a swap used to be simple. A corporate could trade with one of any number of dealers, prices tended to be in a tight range, and spreads were wafer thin. Ninety-nine times out of a hundred, a corporate would choose to trade with the bank offering the best price, with little thought given to tedious issues such as counterparty credit risk.

Things have become a little more complex since the financial crisis. The collapse of Lehman Brothers provided a tough lesson that the dealer community

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