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Short courses>Interest rate swaps

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Interest rate swaps - 2.5 hours

A foundation course that explains all about interest rate swaps. This includes what they are, how they work, how they can be used and the risks they can create.

It is suitable for those working in or around financial markets who need to know more.

There are simple examples with time for questions and answers.

This course is only available in-house and is suitable for up to 12 people.

This is what is covered:

  • Over the counter derivatives
  • Notional, fixed payments and floating payments
  • The price – what you see, buying and selling
  • How much dealers make
  • How dealers can use swaps to trade interest rate risk
  • Outright and spread trades
  • Basis point value – a simple measure
  • How banks use swaps to hedge loans
  • How companies use swaps to fix borrowing costs
  • Risks swaps don’t hedge
  • How a new issue is swapped to a variable funding cost
  • How bonds are swapped to floating rate investments
  • Mark-to-market, what it is, how and why it’s done
  • Swaps and credit exposures
  • How changing interest rates can create credit risks
  • How credit risk can be mitigated by collateral or margin
  • How regulatory changes are affecting the swap market

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