Corporate clash: swap spreads halve as dealers battle for market share

US bank push, rate movements and evolving market practice driving spreads to “suicidal” levels

One afternoon in early April, the treasurer of a large corporate was in a meeting with its hedge adviser. The corporate needed to borrow euros through a cross-currency swap and had asked a handful of banks for quotes. 

One European bank eventually won the trade at a very narrow spread. Shortly after, the corporate was contacted by the bank with a new sales pitch, asking if they would be interested in buying corporate credit cards. The treasurer thought it was a bizarre request. But given that

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