Ex. 17. Read the text quickly to find the types of most widely used swaps:
Foreign Exchange Swaps
Swaps are transactions in which two parties swap financial assets by linking a foreign exchange transaction in cash to an opposite futures business in the same currency.
Foreign Exchange Swap Markets have developed since the early 1980s. The oldest type of swap is the conventional foreign exchange deal whereby one currency is simultaneously bought spot and sold forward against another – meaning an immediate exchange of cash followed by a further reverse exchange at a specified date in the future.
The idea of swapping has now spread further. By far the largest business volume amongst swaps occurs in the so-called "vanilla interest rate swap". A "plain vanilla", or fixed-to-fixed foreign exchange, or currency swap is an exchange of the principal and interest payments associated with a fixed-rate loan in one currency for the principal and interest payments on a similar loan in a second currency. The first such swap between IBM and the World Bank was done in 1981. Since then the swap market has grown to over $ 1 billion and, in the process, has evolved several additional types of currency swaps.
Words you may need:
Foreign Exchange Swap валютный «своп»
to buy spot купить на условиях «спот»
followed by за которым следует ...
vanilla interest rate swap «своп» процентный
plain vanilla простой процентный «своп»
evolve v развиваться, эволюционировать
Ex. 18. a) Read the text quickly to find answers to the following questions: