Template:M intro isda a swap as a loan: Difference between revisions

Template:M intro isda a swap as a loan (view source)

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 “A swap contract is an exchange among peers. It is an equal-opportunity, biblically righteous compact between equals. There is no lender or borrower: each participant is an honest rival for the favour of the Lady Fortune, however capricious may she be.”}}
-So here goes: the [[Jolly Contrarian|JC]]’s position is that, outside the inter-dealer community, this conventional wisdom is not meaningfully true: an “end user” swap ''is'', in fact, a synthetic loan from dealer to customer. Furthermore, to the extent dealers are obliged to post two-way variation margin, ''regulators have made a category error in not realising this''.
+So here goes: the [[Jolly Contrarian|JC]]’s argument is that, outside the inter-dealer community, this conventional wisdom is not meaningfully true: an “end user” swap ''is'', in fact, a synthetic loan from dealer to customer. Furthermore, to the extent dealers are obliged to post two-way variation margin, ''regulators have made a category error in not realising this''.
 Industry veterans may look upon you slack-jawed if you say this. Regulators certainly will.  Being optimistic, they try to give you the benefit of the doubt for this flight of fancy, while thinking “''has the old bugger finally lost his marbles''?”