A Safer Way to Trade Interest Rate Swaps

The new rules seek to prevent a repeat of the financial crisis chaos

In the early days of the interest rate swap market, former Salomon Brothers trader Thomas Jasper remembers, transactions were recorded by hand. “When I was running the swap desk,” he says, “I used to carry my trading book in my breast pocket on one piece of paper.” It was only after the International Swaps & Derivatives Association, which Jasper helped found, created the standard swaps contract known as the master agreement in 1985 that the business began to grow exponentially.

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