Interest rate swaps and cross-currency swaps:
A) appear on the balance sheets of commercial banks as current assets.
B) appear on the balance sheets of commercial banks as current liabilities.
C) appear on the balance sheets of commercial banks as long-term liabilities.
D) do not appear on the balance sheet.

Question

Quizplus · Accepted Answer

Interest rate swaps and cross-currency swaps are off-balance sheet items for commercial banks. They are contractual agreements between parties and do not appear as assets or liabilities on the balance sheet. Instead, they are disclosed in the notes to the financial statements.

Interest Rate Swaps and Cross-Currency Swaps