Calculating fx forward points
Since it was first published in 2014 thousands have benefited from this blog’s common-sense approach to a common misunderstanding. It relates to the calculation of foreign exchange (FX) forward points.
Inflation leads to rapid increase in interest rates
After more than a decade of declines in interest rates, leading to the historically low interest rate environment, the recent reversal has been rapid. The pent-up consumer demand following two years of off-and-on Covid induced…
End of year derivative valuations
When we first took a look at end-of-year derivative valuations back in 2013 borrower derivatives such as interest rate swaps looked much healthier compared to the previous year. However, the reaction of the financial markets…
Rising interest rates, positive impact on borrower’s IRS valuations
Despite a backdrop of trade wars, Brexit and other geo political uncertainties most regions have experienced an environment of increasing interest rates as the outlook is interpreted as generally positive. This has been most pronounced…
Interest Rate Profile Tool
One of my favourite roles at Hedgebook is working with our awesome development team to deliver new, cool functionality for our users. Recently we have been working on the development of an interactive tool to…
LGFA Borrower Note in Hedgebook
It was a fantastic two days rubbing shoulders with the Local Government finance community at the recent SOLGM Strategic Finance Forum in Wellington. It was an opportunity to listen to some of the inspiring initiatives…
Credit conditions worsening means greater materiality of CVA/DVA
The introduction of IFRS 13 in January 2013 was, in part, recognition of the mispricing of market credit risk that had resulted in the near collapse of financial markets in 2008. IFRS 13 requires “fair…
IFRS 7 – Disclosure Requirements of Financial Instruments
A key pillar of Hedgebook’s ethos is to make life easier for corporates in managing and reporting their financial derivative exposures. This approach extends to aiding Treasurers and CFOs comply with the ever increasing compliance…
Credit Value Adjustment
Credit Value Adjustment or CVA has been around for a long time, however, with the introduction of the accounting standard IFRS13, this year there is a requirement to understand it a bit better. The new…
Where do Swaps Fit into Your Company’s Portfolio?
This is part 10 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In part 9, we discussed regulation affecting swaps. In part 10, we’ll review the effectiveness of swaps and whether or not they should be used part of a hedging strategy.
The Euro-zone Crisis: Goldman Sachs, Greece, and Swaps
This is part 8 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In parts 1 through 4, we discussed the differences between interest rate swaps and currency swaps, as well as the pricing mechanisms for fixed-for-floating, floating-for-floating, and fixed-for-fixed swaps. In part 8, we’ll discuss the role of swaps in more recent times: the Euro-zone crisis.
Understanding Central Bank Liquidity Swaps
This is part 7 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In part 7, we illustrated how companies use swaps in the global market place, but on a company-to-company basis. In part 8, we’ll explain the purpose of swaps on the central bank level and when they’re used.