Buy-side firms ditching swaps for loans

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


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,

To continue reading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: