A Cross Currency Basis Swap is a floating/floating swap where banks can swap one currency for another. As there is an exchange of principal, a Cross Currency Basis Swap is not an OBS (off balance sheet) product. Primarily a bookkeeping instrument, it can be used to hedge out floating flows created by various IRS (Interest Rate Swaps) trading books. It can also be used to hedge flow between OBS curves and Forward FX curves. The development of the Cross Currency Basis market has enabled Fixed Income areas to look at a variety of currency issuance to raise funds using the Cross Currency Basis Swaps to switch the flow back to the desired currency.
Our teams, based in London and Lausanne, have a wealth of experience in Forward FX, IRS markets, as well as Cross Currency Basis. Such experience, together with our global network, leaves Tradition well placed in a market that will continue to expand.
Our updated Basis reference page Reuters TRADBASIS1 is a widely used pricing reference tool for institutional Fixed Income desks.
The London office covers:
Single Currency: Sterling, Dollar, Euro
Cross Currency: South African Rand, Emerging Markets, G7 Currencies