Interest Rate Swap

Positive

Negative

Type of clients

all types of clients: retail, professional and eligible counterparties

Clients’ knowledge and experience

- the movement and the possible expectations regarding the hedged reference values;

- lost profits or realized losses related to a negative change in reference values;

- hedging cash flows by entering an IRS in relation to interest payments on credit exposure;

- maintenance of collateral required when concluding an interest rate swap transaction

does not meet the indicated knowledge and experience requirements

Clients’ financial situation with a focus on the ability to bear losses

- to bear a negative result on periodic netting payments on the swap, within the maturity of the instrument;

- the existence of a credit exposure whose interest payments compensate for the possible negative mentioned above

Clients’ risk tolerance and compatibility of the risk

if the objective is hedging, the client's risk appetite will not be considered

inclined to bear the risks of negative deviations of the reference values in the presence of a long-term loan or if they do not have a credit exposure

Clients’ objectives and needs

to hedge an exposure