Interest Rates

Eurex Clearing records second consecutive landmark day

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Yesterday Eurex Clearing had a second consecutive landmark day. After 30 IRS trades on Wednesday, including the first USD cleared trades, yesterday was a record volume day. Over 90 IRS trades with a total value of 7.5 billion Euros were cleared at EurexOTC Clear for IRS. This further demonstrates the significant liquidity that exists at Eurex with open interest at over 30 billion Euros and total volume of 40 billion Euros

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ISDAFIX, Looking for Evidence of Price-manipulation

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There has been much recent press on the investigations into ISDAFIX and whether this will turn-out to be similar to the LIBOR rigging scandal.

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UK vs US regulators on Libor | FT article

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A dual track system to pave the way for a new benchmark tied more closely to objective data? At least this is what Martin Wheatley, the UK regulator leading efforts to reform the London Interbank Offered Rate, has told the Financial Times. On the other side of the Atlantic however, this idea would not seem that appealing as US regulators push for “prompt” switch to transaction-based rates.

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What is an Interest Rate Swap?

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I came across this blog post and felt I should help, so I put together a simple explanation for what a rate swap is. I'm hoping regular reader know this stuff, but have a look and let me know any feedback.

The explanation uses Panasonic as maker of TVs who use the Bond market to borrow, to expand production, and then as interest rates rise, they use a rate swap to fix their payments.

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