One reason for the rapid growth of the OTC interest rate and foreign exchange swap markets is that banks are not required to allocate any capital toward their usage.

Question

Quizplus · Accepted Answer

Banks are required to allocate capital toward the usage of OTC interest rate and foreign exchange swap markets under the Basel III regulatory framework. This was put in place to address the potential risks associated with these markets.

One Reason for the Rapid Growth of the OTC Interest