13min chapter

Monetary Matters with Jack Farley cover image

Banks As Synthetic Hedge Funds | Elham Saeidinezhad on Private Credit ETFs, Interest Rate Swaps as Repo, and the Increasing Interconnectedness Between Banks And Nonbanks

Monetary Matters with Jack Farley

CHAPTER

Interest Rate Swaps as Synthetic Repos

This chapter investigates the innovative use of interest rate swaps as alternatives to traditional repos, focusing on their utility for both hedging and funding purposes. It highlights research from the Jane Family Institute and examines how different entities leverage fixed and floating rate markets based on their credit ratings. The discussion also reflects on the implications of these strategies for hedge funds and the broader financial landscape, emphasizing the significance of understanding these complex financial instruments.

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