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In a swap, traders and investors agree to exchange fixed-rate and floating-rate interest payments for a set period of time based on a nominal dollar amount.
Fingering credit-default swap traders for companies' short-term problems or final death throes is much like blaming short-sellers of stock: both are almost invariably the messengers, not the message.
According to swap traders, the bank's bets are so large $45 billion in net received fixed payments at the end of the third quarter–it could take as long as three weeks to unwind the trades.
The measure to protect swap traders' collateral used in trades to reduce risk was approved by a 4-1 vote.
The rule to protect swap traders' collateral, close to what the CFTC proposed in April, allows brokers to pool customer collateral but would prevent them from commingling the funds with their own capital.
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He had the commission's staff issue an "advisory" on Nov. 14, saying that if a swap trader was doing business in New York, he or she was actually in the United States.
A swap trader can agree to collect a yield pegged to medium- or long-term rates while committing to pay a yield pegged to overnight rates.
On Wednesday, the agency also took up final rules that detailed standards for swaps traders and outlined how such firms should register with regulators.
At one point in early 2007, Mr. Darin told a junior employee that a main consideration for rates submissions was the needs of Mr. Hayes and his fellow yen swaps traders.
United States authorities said that derivatives swaps traders at Rabobank and other banks requested that Rabobank employees make rate submissions used in the calculation that would benefit their trading positions.
They are pretty clever products because they enable swaps traders simultaneously to take a number of views over the life of the swap – 'trading the curve', in the jargon.
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CEO of Professional Science Editing for Scientists @ prosciediting.com