While perusing banking related issues, I noticed this article:
Dollar Debt In FX Swaps And Forwards: Huge, Missing And Growing.
When a company borrows money to build a plant in a foreign country it finds
itself subject to foreign exchange fees, among other things, that add up over
the life of the loan.
Instead, it can meet with another foreign company who wants to build
a plant in this country. Assuming the same amount of borrowed money
for each company they agree to swap the loans making the loans local
for each company.
Saves money and the owners get a new plant, except no one told them
about the loan.
Looks to be about 100 trillion or about ten times the size of the 2008
housing crisis.
But is it worse than, the same, or better than? I can't decide.
Dollar Debt In FX Swaps And Forwards: Huge, Missing And Growing.
When a company borrows money to build a plant in a foreign country it finds
itself subject to foreign exchange fees, among other things, that add up over
the life of the loan.
Instead, it can meet with another foreign company who wants to build
a plant in this country. Assuming the same amount of borrowed money
for each company they agree to swap the loans making the loans local
for each company.
Saves money and the owners get a new plant, except no one told them
about the loan.
Looks to be about 100 trillion or about ten times the size of the 2008
housing crisis.
But is it worse than, the same, or better than? I can't decide.
via International Skeptics Forum https://ift.tt/2D5zFHS
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