FSA leaps into action on liquidity swaps

24 Jul 2011

The FSA has launched a consultation on the nascent market in long term liquidity swaps — an emerging trend that sees banks and insurers putting on bilateral repo trades to give the banks access to liquidity and insurers access to yield.

The regulator said it had observed an increasing trend towards using existing industry standards at much greater scale than before. "Liquidity swaps could have the effect of increasing interconnectedness between the insurance and banking sectors and, in turn, create a transmission mechanism by which systemic risk across the ...

Already a subscriber?

Continue reading this article

Try full access to GlobalCapital

Free trial