FX swap is a type of derivatives, in which both parties agree to a currency swap with each other for some time and then pay the original amount. Example A company may FX swap with Bank B for $ 1 million to USD 19 billion today, three months after the AB signal return and get 19 billion VND 1 million. Course fees and the interest rate for B if the USD and USD interest rates vary. As swap is a type of derivatives and financial reporting requirements in many countries are or are not related to any type of contingent liability for the blade Balak many companies, banks use derivatives to hide the actual transactions. In the example above, A and B can no FX swap contracts written in its final $ 1 million B still has $ 19 million in assets erfasst.Dies is a big mistake category A and B, books can be a for credit or loan leaving secret. Take instead of exchange U.S. $ 1 million of 19 billion dollars (at current exchange rates) after the signing of the swap, B of 20 billion dollars. When the swap agreement expired AB produce 20 million (plus interest, fees) and receive $ 1 million. So, in fact, from B to A loan USD $ 1 billion and mortgage loans will not be in the balance sheets of A and B, as mentioned above. Of course, both A and B are of advantage when borrowers and lenders, such as U-capital ratio of debt does not increase, while the reserve is no longer B, respectively. BA has to accept the credit risk, but can be insured for this risk to the CDS market kaufen.de is a fictitious example above, but in Greece if you change A, B, Goldman Sachs, with $ 1 million 10 billion U.S. dollars . and 19 billion VND to 11 million euros, to discuss the documents are a couple of days here. Lent secret GS 2001 1 million to help Greece in the FX exchange up to Greece meet the requirements of the debt ratio in the EU described. GS, later bought insurance risk of default CDS Greece. Meanwhile, many believe that not only in Greece, that some countries with high debt ratio is also used to reduce debt in order to hide. However, it remains a debt, you can hide the exact number to strangers or supervisors (in the case of Greece is the EU), but can not avoid the charge) to pay (and interest, not to mention the potential risks are very high for both creditors and the government does not expect Schuldner.VN and not use this way to hide the debt, but perhaps not unrelated VN firms and banks in the shape of the cross of control (on rates of interest ceiling on loans or foreign currency trading foreign publisher degrees).

View full post on forex « WordPress.com Tag Feed

Comments are closed.