Swap Break Clauses: Difference between revisions
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imported>Doug Williamson (Mend links.) |
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''Manage | ''Manage risks''. | ||
The right of a bank as the seller to call for termination or re-pricing periodically during the life of a long term swap. Initially sold as a means of managing the fixed rate leg of a long term interest rate swap because banks could price the long term swaps as medium term deals based on the time period to the next break date. Post 2008 regulation means they now carry a capital cost for banks and termination or re-pricing has been known to be called by the bank. | The right of a bank as the seller to call for termination or re-pricing periodically during the life of a long term swap. Initially sold as a means of managing the fixed rate leg of a long term interest rate swap because banks could price the long term swaps as medium term deals based on the time period to the next break date. Post 2008 regulation means they now carry a capital cost for banks and termination or re-pricing has been known to be called by the bank. | ||
[[ | == See also == | ||
[[Interest | |||
*[[Swap]] | |||
*[[Interest rate swap]] | |||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Revision as of 18:50, 24 July 2015
Manage risks.
The right of a bank as the seller to call for termination or re-pricing periodically during the life of a long term swap. Initially sold as a means of managing the fixed rate leg of a long term interest rate swap because banks could price the long term swaps as medium term deals based on the time period to the next break date. Post 2008 regulation means they now carry a capital cost for banks and termination or re-pricing has been known to be called by the bank.
