The Traderszone Network

Published in TZ Latest News 10 June, 2015 by The TZ Newswire Staff

Rising cost on U.S. rate swaps raises worries

A widening gap in the costs to hedge interest rate risk between platforms based in London and Chicago is generating losses for Wall Street dealers and creating concern about how well this corner of the bond market will respond when the Federal Reserve raises rates.     In the last month, dealers have frequently been forced to pay a costly premium on London’s LCH.Clearnet to offset their risk for facilitating interest rate swaps on smaller rival Chicago Mercantile Exchange on behalf of their clients.

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