O'Reilly logo

Key Financial Market Concepts, 2nd Edition by Bob Steiner

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Asset Swap and Liability Swap

Definition

An asset swap is an interest rate swap (IRS) or currency swap used to change the interest rate exposure and/or the currency exposure of an investment. The term is also used to describe the package of the swap plus the investment itself.

A liability swap is an interest rate swap (IRS) or currency swap used to change the interest rate exposure and/or the currency exposure of a borrowing.

How are they used?

An IRS or a currency swap can be used to change the characteristics of a borrowing – for example, from fixed-rate to floating-rate, from floating-rate to fixed-rate, from one floating rate to another (a basis swap), and/or from one currency to another. A swap can equally well be used by an investor to ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required