Liquidity swap: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Create page. Source: FCA webpage https://www.fca.org.uk/publication/guidance-consultation/gc11_18.pdf) |
imported>Doug Williamson (Mend link.) |
||
| Line 13: | Line 13: | ||
*[[Liquidity insurance]] | *[[Liquidity insurance]] | ||
*[[Repo]] | *[[Repo]] | ||
*[[Securities Financing | *[[Securities Financing Transactions Regulation]] | ||
*[[Sterling Monetary Framework]] | *[[Sterling Monetary Framework]] | ||
*[[Stress]] | *[[Stress]] | ||
Revision as of 22:47, 7 July 2021
Liquidity swaps typically refer to transactions which effect a liquidity transformation between:
- an insurer (which has plenty of liquidity) and
- a bank (which is temporarily short of liquidity).
This is usually done by exchanging high-credit quality, liquid assets such as gilts held by the insurer, with illiquid or less liquid assets, such as asset-backed securities (ABS) held by the bank.
