The Basics #11: Interest Rate Swaps
What began as an outgrowth of the Great Inflation desire to better align borrowing arrangements with asset portfolios quickly turned into something immensely more powerful and influential. Interest rate swaps are transformation and the circulation of potential. Sure enough, that means money dealers are right there in the middle of all this. Here we examine the preliminary stuff, the motivations, the history, the mechanics. And then we begin to uncover the real systemic importance.
