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Started By
Message
BIS warns of $80 trillion of hidden FX swap debt
Posted on 12/5/22 at 9:57 am
Posted on 12/5/22 at 9:57 am
4
Posted on 12/5/22 at 10:32 am to Klondikekajun
Is this that milk shake theory they talked about actually happening?
Posted on 12/5/22 at 11:14 am to SanJoseTigerFan
quote:
this that milk shake theory they talked about actually happening?
It seems to be the explanation for the rise in value of the dollar compared to other currencies over the past year
Posted on 12/5/22 at 12:36 pm to Klondikekajun
Posted on 12/5/22 at 5:11 pm to Klondikekajun
Quite the regulatory blind spot. I guess the feds want to take their lack of enforcement shitshow into crypto now
Posted on 12/6/22 at 9:48 am to Aubie Spr96
quote:Found this in the article, it may help.
The report also focused on findings from the recent BIS global FX market survey, which estimated that $2.2 trillion worth of currency trades are at risk of failing to settle on any given day due to issues between counterparties, potentially undermining financial stability.
While we're on this subject, let me take a sec to say frick you to OP. You drop an article with some huge numbers in it and don't explain or quote shite and ask a stupid question expecting everyone else to do your homework. Real POS.
This post was edited on 12/6/22 at 9:50 am
Posted on 12/6/22 at 10:33 am to saint tiger225
quote:
While we're on this subject, let me take a sec to say frick you to OP.
WOW! You’re a cheery lad. Sorry somebody peed in your Cheerios this morning & I hope you feel better after putting me in my place.
I’m sorry some of us peons aren’t as brilliant as you and want to get input from subject matter experts on the board. If I understood it, I wouldn’t be asking for additional insight…
PS- Merry Christmas & please don’t kick your dog.
Posted on 12/6/22 at 10:44 am to Klondikekajun
I'd kick you in the nuts if I could.
I was just messing with you though bc I know my love of FX wasn't going to let me not research more of this.
I found an answer too. In the most simplest way to put it, the BIS is warning that central banks will have to bailout "capital markets".
Must be nice to make a bunch of shite investments or have stupid disagreements (op article mentioned something about this, I didn't dive deeper though) be covered by central bank bailouts.
I was just messing with you though bc I know my love of FX wasn't going to let me not research more of this.
I found an answer too. In the most simplest way to put it, the BIS is warning that central banks will have to bailout "capital markets".
Must be nice to make a bunch of shite investments or have stupid disagreements (op article mentioned something about this, I didn't dive deeper though) be covered by central bank bailouts.
This post was edited on 12/6/22 at 10:46 am
Posted on 12/6/22 at 11:51 am to saint tiger225
quote:
I'd kick you in the nuts if I could
Glad you’re not really wound that tight- I was worried about you (& your pupper)… now I can go to Sonic without looking over my shoulder.
Anyway, I’ve read about a possible lag in fallout from crypto being weeks/ months as it unwinds & I’m trying to see how the currency settlement markets might fit in.
This stuff is so mind numbing that I think I’d rather be kicked in the nuts than try to understand it…
Posted on 12/6/22 at 12:25 pm to SanJoseTigerFan
Yes. It’s not an issue in of itself unless currency and rates are highly volatile and counter party risk is high 
Posted on 12/7/22 at 8:51 am to Klondikekajun
quote:I'm still here.
This stuff is so mind numbing that I think I’d rather be kicked in the nuts than try to understand it…
Posted on 12/7/22 at 11:05 am to Klondikekajun
Not a guru, but I'll take a stab...
An FX swap is when two parties exchange given amounts in two currencies. For example, one party might receive 100M British Pounds (GBP), while the other receives $125M (USD). This implies a GBP/USD exchange rate of 1.25.
If I read this correctly, a lot of investment firms lost around $80T in value for them and their clients because of changes in values.
quote:
LONDON, Dec 5 (Reuters) - Pension funds and other 'non-bank' financial firms have more than $80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said.
The BIS, dubbed the central bank to the world's central banks, also said in its latest quarterly report that 2022's market upheaval had largely been navigated without major issues.
An FX swap is when two parties exchange given amounts in two currencies. For example, one party might receive 100M British Pounds (GBP), while the other receives $125M (USD). This implies a GBP/USD exchange rate of 1.25.
If I read this correctly, a lot of investment firms lost around $80T in value for them and their clients because of changes in values.
This post was edited on 12/7/22 at 11:07 am
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