Word: swaps
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Dates: during 2000-2009
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...rejected the proposal as impractical, China's leaders have been taking steps to show just how nervous they are about a weaker dollar as the U.S. runs up massive deficits to shore up its crumbling economy and financial system. In the past two weeks, China signed multibillion-dollar currency-swap agreements with Indonesia and Argentina that effectively allow Beijing's two trading partners to bypass the dollar as a medium of exchange. The deals followed similar swaps China has hammered out over the past six months with Malaysia, Hong Kong and South Korea. The combined value of the various swaps...
...There have been other recent hassles with dollar-based trade. When U.S. financial institutions like AIG and Lehman Brothers began to disintegrate in 2008, global money markets were so roiled it became expensive for any trade to be done at all in dollars. "What precipitated [China's swap agreements] was the collapse of Lehman Brothers and the worries over trade financing at that time," says Johanna Chua, a regional economist with Citigroup in Hong Kong. "If the dollar is extremely volatile it costs more to hedge...
...greater.While Harvard has “robust credit strengths” and maintains a $2 billion line of credit from a consortium of banks, Moody’s said the University’s liquidity position has suffered recently due to endowment losses and stress in the debt and swap markets. In December and January, Harvard completed $2.5 billion in bond sales to guarantee cash flexibility and refinance risky variable rate debt.According to the report, disruptions in the tax-exempt variable rate debt markets last fall “increased the perceived risk that Harvard could experience a failed remarketing...
...cash payments to CDS [credit-default swap] counterparties should never have occurred," Greenberg told a House oversight committee. Greenberg is not alone is raising questions about profits that financial firms have been making on the unwinding of AIG's derivative bets. Last week New York attorney general Andrew Cuomo said he was looking into AIG's trading records to examine whether the payments the company made to other financial firms were improper. (Read "How to Know When the Economy Is Turning...
...bond sale could not be obtained because the sale was taxable, a prospectus of the $1 billion tax-exempt offering states that $881 million was to be used to pay off previously-issued variable rate debt and commercial debt, while $99 million would be used to terminate interest rate swap agreements that had been used to hedge risk from the variable debt.According to the University’s annual financial report issued in October, “the interest rate exchange rate agreements were not entered into for trading or speculative purposes,” but were rather used...