Swap auction frictions prompt search for new tactics

Standards may be needed to preserve benefits of credit-auction approach to big swaps

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Under the hammer: banks' prices for counterparty credit risk can vary significantly

Cross-currency swaps go hand-in-hand with counterparty risk: often used by corporate treasurers to hedge debt issuance, they are typically chunky, long-dated and uncollateralised. That recipe makes them an expensive product in the post-crisis world. In traditional derivatives market fashion, the answer in recent years has been to split the trades up – syndicating out the credit component of the transaction to dealers who have appetite for it, and in theory saving money for the client.

"The ratio

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