Buy-side firms ditching swaps for loans

Some buy-side firms' preference for swaps is on the wane

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One of the reasons why over-the-counter derivatives exist, so the textbooks will tell you, is to transfer risk to a more suitable home. In reality, things are a little more complicated. Take the example of infrastructure loans and other long-dated financing. Borrowers would habitually use derivatives to hedge their interest rate exposure, but because these swaps were lucrative, banks often treated the business as a package – offering the loan cheaply in the hope of winning the accompanying swap,

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