FX swaps to avoid year-end basis blowout, banks say
Earlier rollovers likely to ensure no repeat of previous cross-currency volatility
Bankers are confident that as the year-end nears, financial markets won’t experience the turbulence of previous fourth quarters when the cross-currency basis widened and repo rates spiked amid a US dollar funding squeeze.
The market distortion has historically occurred when banks reduced balance sheet during the final quarter to achieve lower regulatory capital, but treasurers and investors have
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