Summary:
I am now seeing more attempts to dig into what exactly happened in the United Kingdom interest rate market. In this article, I am not attempting to do that. Instead, I am just giving a primer on how interest rate swaps are used to hedge liabilities, and what can go wrong when interest rates rise. The mechanisms I describe were likely part of the issue, but I am not saying that this is “the” explanation. Since most people are unsure what liability-driven investment and swaps are, so I am hoping to cover big picture issues for those readers.…Bond Economics Primer: Basics Of A Swap MeltdownBrian Romanchuk
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
I am now seeing more attempts to dig into what exactly happened in the United Kingdom interest rate market. In this article, I am not attempting to do that. Instead, I am just giving a primer on how interest rate swaps are used to hedge liabilities, and what can go wrong when interest rates rise. The mechanisms I describe were likely part of the issue, but I am not saying that this is “the” explanation. Since most people are unsure what liability-driven investment and swaps are, so I am hoping to cover big picture issues for those readers.…Bond Economics Primer: Basics Of A Swap MeltdownBrian Romanchuk
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
New Economics Foundation writes Sharing the carbon pie with a frequent flyer levy
Peter Radford writes The eclipse part wo
Matias Vernengo writes The Argentina of Javier Milei
Joel Eissenberg writes On student loans
I am now seeing more attempts to dig into what exactly happened in the United Kingdom interest rate market. In this article, I am not attempting to do that. Instead, I am just giving a primer on how interest rate swaps are used to hedge liabilities, and what can go wrong when interest rates rise. The mechanisms I describe were likely part of the issue, but I am not saying that this is “the” explanation. Since most people are unsure what liability-driven investment and swaps are, so I am hoping to cover big picture issues for those readers.…Bond Economics
Primer: Basics Of A Swap Meltdown
Brian Romanchuk