Considering derivatives for smoothing earnings and managing interest rate risk

After moving significantly higher on the back of a hotter-than-expected inflation reading the week prior, Treasury yields remained very volatile throughout the week and ended the week moderately higher across the curve as investors grappled with the FOMC’s decision to raise the Target Range 75...

Treasury yields across the curve moved notably higher last week, while the major U.S. equity indices continued to decline, as market participants digested the latest inflation data and placed bets for a more hawkish Federal Reserve.

In a week packed with high-profile economic updates and a robust Federal Reserve speaking calendar, Treasury yields across the curve moved notably higher, erasing the moves from the week prior. The major U.S. equity indices resumed their decline after seeing the first positive week in nearly two...

Volatility remained elevated last week as Treasury yields across the curve declined, while the major U.S. equity indices snapped a seven-week losing streak to finish in the green as investors weighed weak economic indicators with hopes that inflation has peaked.

Banks use back-to-back swaps to meet borrower demand for long-term fixed-rate loans. With back-to-back swaps, the bank enters a floating-rate loan and a fixed-rate swap with the borrower and then a second, offsetting swap with a dealer counterparty.

We are excited to share market insights, best practices, and product enhancements from our advisory teams focused on community and regional financial institutions. Topics will include borrower swaps, balance sheet risk management, hedge accounting, and regulatory compliance, among others.

In a conversation with S&P Global Market Intelligence, Ben Lewis and Chris Funck explained why back-to-back swaps, a type of hedging program that allows banks to offer commercial borrowers fixed-rate payments while simultaneously laying off the interest rate risk, could accelerate this year...

A financial institution should evaluate two options when competing for borrowers who need fixed-rate funding: providing a traditional fixed-rate loan or providing synthetically fixed-rate financing via a floating-rate loan and a pay-fixed swap. Review the six benefits to consider when evaluating the best solution to provide your borrower with long-term, fixed-rate financing.