Straight-through processing is an innovation that has developed alongside the integration of computers and computer programming. In the early 1970s, Automated Clearing Houses (ACH networks) began development.1 The Society for Worldwide Interbank Financial Telecommunication (SWIFT) was also founded aro...
For example, a bank may swap a 3% debt obligation in exchange for a floating rate obligation of theLondon Interbank Offered Rate(LIBOR) plus 0.5%. LIBOR may currently be 2.5%, so the fixed and floating rates are the same right now. Over time, though, the floating rate may change. If ...