Nigeria and China Bilateral Currency Swap: Perceived Economic Implications and Prospects:

This study examined Nigeria and China Bilateral Currency Swap: Economic Implications and Prospects. Survey design was used to determine the impact of Nigeria – China economic ties on Nigerian imbalance of payment, foreign reserve, consumption of local products and job creation among others. The responses from the audience reveal that Nigeria and China Bilateral Currency Swap agreement will encourage job creation and importation activities in the country. While more than 50% of the respondents echoed that this agreement will increase imbalance of payment, reduction in foreign reserve and less consumption of domestic products. The study concludes that this agreement will cause future development of trade between the two countries and improve liquidity. In order to enhance employment opportunity in the country, the local engineer should be trained and employed to collaborate with Chinese. The economic cord will make accessibility of fund easier. Therefore, importers, exporters and other type of business ventures are expected to use the opportunity and boost their operations. Government and business managers should make use of the available fund and diversify in other sectors like agriculture, establishment of local industries and focus on the products for exportation. The study recommends the implementation of suitable policy on importation, to avoid the idea that Nigeria will become a dumping ground for Chinese products

The Impacts of Policy Infrastructures on the International Use of the Chinese Renminbi

Despite burgeoning research on the internationalization of the Chinese renminbi, there has been surprisingly little systematic analysis of how the renminbi is actually used in foreign markets. This study provides a cross-country analysis of renminbi use in offshore foreign exchange markets, with special attention to the effects of the cooperative policy measures adopted by China and foreign states to promote the renminbi’s international use. We find that a country’s participation in the Renminbi Qualified Foreign Institutional Investor scheme (which expands its renminbi investment opportunities) and its establishment of an offshore renminbi clearing bank (which provides better renminbi payment services), but not its entry into a renminbi–local currency swap agreement, facilitate use of the renminbi in its foreign exchange markets. States have played a significant role in the rise of the renminbi as a newly internationalizing currency.

A possibilidade de aplicação do código de defesa do consumidor em contrato de derivativos / The possibility of consumer relationship in derivative contracts

Resumo: Este artigo aborda a controvérsia da aplicação do Código de Defesa do Consumidor às relações jurídicas contratuais no âmbito do mercado de derivativos, tendo em vista os tipos de operações efetuadas, o hedge (proteção), a arbitragem e a especulação. A princípio poder-se-ia pensar que são todos contratos empresariais, em que se busca o lucro, mas através do estudo, usando a título de exemplo o contrato de swap, típico para operações de hedge, chega-se à conclusão que estas operações podem se enquadrar na relação de consumo. Essa conclusão decorre, levando-se em conta uma pessoa jurídica que busca uma instituição financeira para realizar um contrato swap, da adequação ao conceito de consumidor, bem como de produto e serviço prestado, qual sejam, respectivamente, a proteção e o conhecimento técnico e estrutura de gerenciamento de risco que a instituição possui, o que quase sempre leva à uma hipossuficiência técnica do contratante. Assim, a relação de consumo é aceitável e de possível aplicação no mercado de derivativos, mas somente nas operações de hedge, em que se busca um produto, a proteção, e o serviço, o conhecimento técnico da instituição. Portanto, colocam-se em xeque os argumentos de que o direito fundamental da proteção ao consumidor, através do Código, não se estenderiam ao âmbito do mercado de derivativos, fazendo incidir apenas as normas do Direito Civil.Abstract: This paper discusses the application of the controversy of the Consumer Protection Code to contractual legal relationships in the derivatives market, in view of the types of operations performed, the hedge (protection), arbitrage and speculation. At first it may be thought that are all business contracts, which seeks to profit, but through study, using as an example the swap agreement, typical for hedge transactions, one comes to the conclusion that these operations they may fall in consumption ratio. This conclusion follows, taking into account a legal person seeking a financial institution to hold a swap contract, the adequacy consumer concept and product and service, which are, respectively, the protection and the technical knowledge and risk management framework that the institution has, which almost always leads to a contracting technique vulnerability. Thus, the consumption ratio is acceptable and possible application in the derivatives market, but only in hedging transactions, which seeks a product, protection, and the service, the expertise of the institution. So put yourself in check the argument that the fundamental right of consumer protection, through the Code, does not extend the scope of the derivatives market, making only focus the rules of civil law.

Swap agreement safe harbors at risk in latest Lehman dispute

Purpose – This article addresses important policy issues raised in the latest Lehman dispute that directly impact the over the counter derivatives market and market participants, specifically in regards to the history and purpose of the Bankruptcy Code’s “safe harbor” provisions for swap agreements. Design/methodology/approach – By examining the background of, and arguments presented in, the ongoing adversary proceeding, Moore Macro Fund, LP v. Lehman Brothers Holdings Inc., and the related bankruptcy case, in re Lehman Brothers Holdings Inc. the authors offer their interpretations of the scope and intent of the applicable safe harbor provisions concerning set-off rights in the context of terminating swap agreements. Findings – Parties to ISDA agreements should carefully monitor this case, as the outcome could shape the enforceability of the Bankruptcy Code and the strategic analysis of counterparties following a counterparty’s or credit support provider’s bankruptcy. Practical implications – Parties must also be cautious when assuming all contractual provisions in industry-standard master agreements will be enforceable. This case confirms that contractual provisions seeming to reflect the intent of the parties may still be called into question before a court. Originality/value – Litigation analysis and practical advice on the ongoing changes to the physical, futures and derivatives markets from experienced derivatives/structured products and bankruptcy/commercial restructuring lawyers.

Interest Rate Swaps: Risk Exposure And Financial Disclosure

In recent years, the trading of interest payments on debt obligations has become a major form of off-balance sheet financing. As swaps have increased in dollar volume, the amount of financial disclosure about these instruments has remained nonexistent or minimal. Yet, even with a lack of financial information available to evaluate swaps, previous analyses of swaps have always focused on their positive aspects. Our analysis finds there are negative aspects to swaps that need to be considered. The issues of lack of financial disclosure, unfavorable changes in risk exposure as well as questions about risk evaluations of firms involved in swaps are all related to the negative aspects of swaps. These issues are considered here. It is concluded that although there are advantages to swaps, these advantages are intrinsic to the instrument itself rather than to the alleged arbitrage profits. Furthermore, an example is used to illustrate how a firms risk exposure can be altered by a swap agreement. The ability of the market to evaluate the change in this risk may be hampered by lack of financial disclosures.