Cross-currency swaps

Choice of collateral currency

Collateral agreements are becoming popular in the over-the-counter derivatives market. Masaaki Fujii and Akihiko Takahashi demonstrate its significant impact on derivatives pricing with a direct link to the cross-currency market. The importance of…

Betting on basis

Large offshore capital raising efforts by Australia’s banks and a relative dearth of activity in the kangaroo bond market has led to a significant widening in the cross-currency basis swap. This imbalance has created a large profit opportunity for fund…

Carry trade bonanza

Asian governments and quasi-government entities have issued record volumes of debt this year. This, combined with strong currency moves, is fuelling swaps activity in the markets. Can it last? William Rhode reports

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