FX structurers see mixed demand for cross-asset hedges


Foreign exchange structuring desks are seeking to cash in on the increased cost of long-term hedging in the rates and credit markets that is resulting from new capital requirements by offering cheaper FX structured products to buy-side clients.

Basel III, which includes a credit valuation adjustment (CVA) capital charge for trades not cleared through central counterparties, means rates and credit trading will consume far more capital, and banks are passing on the costs to end users. While the FX

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