Equity-Linked Swap: School-To-College

imagesContinuing with our last blog, today we will discuss in detail about “Equity-Linked Swap” under Structured derivative class.

Meaning: A swap for which payments on one or both sides are linked to the performance of equities or an equity index. Sometimes used to avoid withholding taxes, obtain leverage, or enjoy the returns from ownership without actually owning equity.

Definition: An equity swap is a financial derivative contract (a swap) where a set of future cash flows are agreed to be exchanged between two counterparties at set dates in the future. Continue reading “Equity-Linked Swap: School-To-College”

Financial Markets and Maverick Arguments

The way things are turning out like  The Barclays Saga and Libor , LIBOR Manipulation : ny thing for you Big Boyz , JP Morgan : Jamie Dimon Testimony and the series is endless ..I believe the quotes of the maverick author holds true :

The Rogue Trader or The Rogue Banks

I did post almost a year back, but when I see today the scandals are now more in public compare to last year and the post holds true to the words. They are much more bigger now the Hedging trade of JP Morgan, The LIBOR saga….

It was my Penultimate day on the  visit to Paris Sept 2011, when the news break out UBS took a hit of $2 billion loss by the action of a Rogue Trader.

The Euro zone already under deep crisis and UBS was planning to cut down several jobs, Continue reading “The Rogue Trader or The Rogue Banks”

The Barclays Saga and Libor

A week before I did a story on the manipulation of the London Interbank Offered Rate   “LIBOR Manipulation : ny thing for you Big Boyz ”

As the blood flows from the proverbial carcass of Former Barclays chief executive Bob Diamond and political pressure claims the scalp of COO Jerry del Miser, the key focus up to what extent Barclays is culpable for the Libor saga and just how much markets should fear litigation and rolling heads at other head institutions.

I have tried to put in the understanding and the importance of LIBOR.

LIBOR has been called “the highway of finance” because it serves as the universal interbank benchmark interest rate used to price cash instruments in the real economy (deposits and loans) and short Continue reading “The Barclays Saga and Libor”

LIBOR Manipulation : ny thing for you Big Boyz

Well ever thought or imagine of influencing the reference rate. Barcalys did that exactly the same in return the regulator FSA fined it with the largest fine in an attempted manipulation of and false reporting of LIBOR and Euribor Benchmark rates.

The LIBOR rate is a critical element of the financial system. Before I move further some basics on it to understand the scenario: LIBOR stands for ‘London InterBank Offered Rate‘. It is produced for ten currencies with 15 maturities Continue reading “LIBOR Manipulation : ny thing for you Big Boyz”