An exchange of a fixed for a variable interest rate arrangement. Despite the high risk of these swaps, in practice the return on the deal can be as low as one-twentieth of 1 per cent. This form of rescheduling debts was used in the 1980s by UK local...

An interest rate swap is a derivative in which one party exchanges a stream of interest payments for another party's stream of cash flows. Interest rate swaps can be used by hedgers to manage their fixed or floating assets and liabilities. They can also...