Profit is not the motivation for the interest rate swap but mainly to reduce risk for the borrower and a commission for the bank. It is beneficial to both parties. The borrower is happy that it has reduced the risk of future losses as the loan interest is fixed and no longer based on a variable interest while the bank earned something from the transaction. Swapping is the most complex financial tool that is being used but a necessary transaction for corporations and companies. If you are planning to go for interest rate swapping, you need to understand well how it works before you embark on it. Berg Interest Rate Swaps can help you.
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