Technology, research and development, capital and economic growth, merge in the lexicon of the company of the future. Economic globalization has been energized by the profound revolution of technological progress. Telecommunications, as a vehicle for information and data, move capital and unify the financial world. The companies are united in economic groups through strategic alliances to face competitiveness and face the transnationality (cross-border) of the markets. The outsourcing of the economy has led entrepreneurs to devise new technological tools that allow them to keep pace with the competition and in the best of cases, take the lead.
Keywords: Innovation, capital, competitiveness, entrepreneurship, technology, company, transactions.
- CAPITAL AND THE MACHINE
The global economy is characterized by free trade in goods, services and the free movement of capital. Interest rates, exchange rates and stock prices in various countries are directly related to global financial markets, exerting a great influence on economic conditions. The preponderant role that international finance capital plays in the development of countries allows us to speak of a global capitalist system. Basically the system is composed of a center and a periphery, where the center is the provider of capital and the periphery is the customer of capital. The rules of the game are in favor of the center, there the international monetary policy is designed and imposed. It could be said that the center is in New York and London,because the international financial markets are located there, or in Washington, Frankfurt and Tokyo, because the world's money supply is defined there. Monetary capital is located in the most important cities in the world, as a symbol of its development and power, all this movement includes the stock exchanges, which use new information technologies, such as the ICB.
| COUNTRY | BAG INDICATOR | VALUE | BEHAVIOR | PERCENTAGE CHANGE |
| Spain | IGBM | 1099.54 | -10.61 | -0.96% |
| USES | Dow Jones | 11048.11 | +112.00 | + 1.02% |
| USES | Nasdaq (High Tech) | 4673.96 | -159.93 | -3.31% |
| USES | S&P | 1512.89 | +5.16 | + 0.34% |
| UK | FTSE 100 | 6598.8 | -51.3 | -0.77% |
| Germany | DAX | 7864.76 | -67.17 | -0.85% |
| Argentina | MerVal | 584,390 | -4,540 | -0.77% |
| Brazil | Bovespa | 18033.23 | -304.67 | -1.66% |
| China | Shanghai | 1788,807 | -2,634 | -0.15% |
| France | CAC | 6505.48 | -18.82 | -0.29% |
| Holland | AEX | 682.73 | -5.21 | -0.76% |
| Honk kong | Hang seng | 18096.37 | -205.32 | -1.12% |
| Italy | MIBTEL | 32602 | -63 | -0.19% |
| Japan | Nikkei | 20706.65 | +332.31 | + 1.63% |
| Mexico | CPI | 7878,720 | -73,480 | -0.92% |
| Venezuela | IBC | 5591.46 | -124.32 | -2.18% |
Table prepared by the author with data from March 29, 2000.
Capital generates multiple benefits, increasing and improving productivity, and driving financial innovations. Each country designs attractive conditions competing to attract, retain and exploit capital, which has a non-territorial nature, which makes it easier for it to move in the direction that suits it best. This global capitalist system is not recent, nor is it even new.
From a technical point of view, the birth of capitalism and the change from a barter economy to a money economy with an international credit structure, has led to the generalization of abstract symbols of wealth: banknotes, checks, value papers. and the numbers. This had its origins in northern Italy, particularly Florence and Venice, in the 14th century; Two hundred years later there was an International Stock Exchange in Antwerp dedicated to helping speculators in transports from foreign ports. In the mid-16th century, double-entry bookkeeping, bills of exchange, and speculation in "futures" developed in a modern way. Money capital arose hand in hand with the creation of the machine, bringing new habits to the life of man,it took people from the tangible of commodities to the intangible of the ledger, to non-products, to futures deals. Time became money, money power, as a social leveler, power demanded increased production in factories and the promotion of trade, generating capital for wars and conquests in foreign lands, opening roads for international business.
Meanwhile, the field of technology made its own journey, since man discovered fire and its applications in ovens for their homes before the 10th century, the decimal system in the year 1080, the University of Bologna in the year 1100, the magnetic compass in 1195, the paper factory in 1390, the modern printing press in 1440, the inventions of Leonardo da Vinci from 1472 to 1519 - among which are the centrifugal pump, the construction dredge channels, rifled firearms, link chains, the submarine ship, the endless screw, the parachute, the tube of lamps and the construction of standardized houses, among others of equal relevance. The first portable clock was invented in 1500, the fire fighting machine in 1518, modern surgery in 1545;then came logarithms in 1614, the machine for making tiles in 1619, the periscope in 1637 and differential calculus in 1680; machinery used in mining and textiles was rapidly perfected, the sewing machine was invented in 1711, the typewriter in 1714, the cement factory in 1756, canned food in the year 1795, the manufacture of bleaching powder in the year 1799; there were great advances in energy conversion, scale production of textiles, iron, steel and machinery, it was also the era of the construction of railways. In the year 1800 the galvanic battery was invented, the first patent for a car in the year 1807, the elevators in the year 1830, the tire wheels in the year 1845, the London science museum in the year 1853,asphalt paving in 1860, dynamite and the bicycle in 1867, the telephone in 1876, the dirigible balloon in 1883, the Eiffel Tower in 1889 and X-rays in 1895.
In 1903 the radiotelephone, the first airplane piloted by a man, was invented and the German museum opened its doors; vitamins were invented in 1912 and radio and television in 1927.
But as for the main tool for managing information in financial innovation, it was developed between 1943 and 1946 at the University of Pennsylvania, weighed 30 tons, worked with vacuum tubes and kept information on punched cards, it was the first generation of computers, the machine is known by the name of ENIAC –Electronic Numerator, Integrator, Analizer and Computer–. Then in 1947 the transistor was invented and the progress of computers reached the second generation, until lighter and cheaper machines were developed in the world of computer engineering. In 1974 came the first personal computer in history, called the MITS Altair 8800, followed by the Apple I and II, the Commodore PET and the one that would finally prevail over the others in 1981: the IBM PC.
This unbridled race did not stop here, in 1982 the Microsoft company launched the MS-DOS operating system for the IBM PC; in 1983, Sony launched the 3.5-inch double-sided double-density floppy disks and in 1984 Steve Jobs launched the Macintosh. Everything could continue to evolve routinely were it not for the DARPA program of the United States Department of Defense, which investigated technologies that would allow it to connect computers to each other: the Internet. In 1981 Tim Berners Lee, a scientist at CERN - European Center for Nuclear Research, created a hypertext system capable of organizing information on the Internet efficiently, called World Wide Web - WWW -, this has allowed that a military project becomes a means of communication for all uses,now used in the world of international finance, shortening distances, operating in real time and lowering the cost of transactions.
Capitalism was consolidated, it became dominant in the 19th century hand in hand with technology, with the speed of communications as one of its strengths. Its indisputable novelty, the invention of telephony and telegraphy represented an acceleration in the nineteenth century until the development of computer communications in our days. International trade, the flow of capital, information and entrepreneurship have created what was once thought to be the future: the competitive present.
Capital is the reason for changes in the socioeconomic environment, its mobility makes direct physical investment lose the privilege, subject to national taxes and pressures. Moving a multinational factory is more expensive than moving international capital, which is now done electronically. Multinational companies enjoy flexibility and some guarantees from national governments in making investment decisions, but these advantages are not comparable to the freedom of choice enjoyed by international portfolio investors, who in turn can speculate in the market.. The variety of opportunities is also facilitated by being in the center of the global economy instead of on the periphery, the powers know that they are suppliers, not clients or users.
Finance capital plays a dominant role in today's world by influencing the financial markets of the global capitalist system. In times of crisis and uncertainty, capital has the tendency to return to its place of origin, producing greater alterations in the periphery than in the center. Hence, economists say that when Wall Street catches a cold, the rest of the world contracts pneumonia. In the case of the Asian crisis, the problems started on the periphery, but once Wall Street began to grind, the withdrawal of funds from the periphery was overwhelming and ultimately fatal to its economy. Here the information systems did not operate early warnings for making decisions in time,The computers that help to take these measures had not been programmed to act in the face of this contingency and their operating parameters were exceeded by the need to act in time from the political to the economic.
The free movement of capital is a recent phenomenon. At the end of the Second World War, economies had a national character, international trade was in the doldrums, and direct investments such as financial transactions were at a standstill. The Bretton Woods institutions - IMF and WB - were created to promote international trade in the absence of international capital movements. The World Bank was conceived to compensate for the lack of direct investment; the IMF, the lack of financial credit to reduce imbalances in trade.
In this sense, international capital in underdeveloped countries was oriented to the exploitation of natural resources without defining policies to increase foreign investment, they tried to expropriate it, this was taken advantage of by American companies, which moved to Europe, and later to the rest of the world. Many key industries, such as pharmaceuticals, automobiles, and computer science, came to be dominated by large multinational companies. Thus, international financial markets took longer to develop, also because many national currencies were not convertible and countries maintained controls on capital transactions. In this sense, the stock exchanges were gaining greater power in the market as benchmarks for investing in companies according to their variations.
| The Wall Street Journal |
| Section: Markets and finance.
US markets began trading on Wednesday with mixed trends. On the one hand, the Dow Jones Industrial Average recovered from the falls of the previous day and just over an hour after the opening it gained 76.40 points to stand at 11,012.51, just one year after the barrier passed. out of 10,000. For two months, however, the Dow Jones has struggled to establish itself solidly above 11,000. The same fate followed the S&P 500, which rose 6.81 points, reaching 1,514.54 integers at that time. Tech stocks, however, due to the recommendation made yesterday by Goldman Sachs' head of investment strategy to ditch these investments, is seeing sales continue. The Nasdaq lost 59.77 points, 1.24%, to settle at 4,774,12 integers. March 29, 2000 |
Financial innovation was stimulated by crises. In 1970, the oil-producing countries formed the Union of Petroleum Exporting Countries -OPEP-, and raised the price of crude oil. Oil exporters enjoyed large surpluses while importing countries had to finance large deficits. Responsibility for financing the funds fell to commercial banks with the encouragement of Western governments.
Eurodollars were invented as a reference for the currencies of the nascent European Economic Community, today the European Union, and large offshore markets were developed. The international lending boom plunged the world into a recession and international debt crisis in 1982, several years elapsed before the world economy recovered. In Latin America they talk about the lost decade. After the crisis of 1982, it was thought that the excess of loans was not going to be repeated; However, it happened again in Mexico in 1994 and in the Asian crisis of 1997, this shows that countries forget their ability to borrow, all to access the resources of international capital.
| Analysis of the International Monetary Fund, taken from The Wall Street Journal |
| The International Monetary Fund expects Latin America's gross domestic product to grow 4.0% this year and for the region to register an inflation rate of 8.4%. The IMF also forecast a current account deficit of 2.7% of GDP in 2000, according to figures released at a press conference that Fund officials held during the Inter-American Development Bank meeting in New Orleans. For 1999, Latin American GDP growth was 0.3% and the region registered an inflation rate of 9.6% and a current account deficit equivalent to 2.8% of GDP, he said.
March 29, 2000 |
- FROM PERSONAL RELATIONS TO COMMERCIAL TRANSACTIONS
The evolution of technology has responded to the needs of human beings, their curiosity and creativity. Technological development has allowed the differentiation of countries by their degree of development and ability to generate and optimize resources. For this reason, developed countries impose their conditions in terms of economic policy and international relations.
There has been an incremental transformation in international markets. Lasting face-to-face relationships, where people meet before negotiating, have been replaced by business transactions. The business where the owner and customer meet has disappeared before the hypermarket and the Internet. National economies have been replaced by an international economy where products must meet world quality and price standards, customers are global and a new scenario has arisen: e-commerce (electronic commerce).
The replacement of relationships by transactions is a historical process, where each transaction has value in itself and investment banks compete for each fragment of business. These transactions revolve around money, which is the unit of account, the medium of exchange and the store of value to obtain goods and services. Social and moral values are of little interest, embodying serious dangers for a transactional society where the individual loses his identity under the pressure of competition, he is only interested in winning or winning. Relationships where the word had commercial value have disappeared, responsibility, ethics, and good repute are values that run the risk of disappearing under the weight of transactions.
- CREDIT IN FINANCIAL MARKETS
The scientific and technological revolution spreads on the basis of the diffusion of information technologies derived from microelectronics and computing. The articulation and application of these technologies with the productive world postulates the existence of technological systems that contribute to the increase in productivity in the economic process, requiring investments in capital goods and pressuring companies to manage resources through indebtedness.
Great technological innovations require capital markets that facilitate their financing. Asian countries are reinventing their economies, such is the case of Malaysia and its capital Putrajaya with the high tech scenarios, the University of Multimedia and the MSC project - Multimedia Supercorridor - in which the great promoter and promoter of the initiative is the government itself with an investment of US $ 1 billion in a financing fund for techno-entrepreneurs. Hong Kong has $ 1.7 billion reserved to build a cyberport for high-tech companies. Taiwan a leader in PC manufacturing. Singapore is a business and service center for cutting-edge technologies, and even China is promoting a virtual manufacturing platform initiative.
All these initiatives require seeking capital in the international arena, so they must access credit. Money is directly connected to credit, but the role of credit is less well known than the role of money. The credit is issued after circumstantial or other proof of the solvency and value of the guarantee, in view of the creditor; for this reason it is said that it is given to those who show that they do not need it. Access to international credit plays an important role in the economic growth of domestic economies. The ability to borrow greatly enhances the profitability of investments. The expected rate of return is usually higher than the risk-free interest rate to justify the investment and to seek a profit margin on borrowing.The cost and availability of credit become important elements when influencing the level of economic activity of the company and can constitute a competitive strategy.
International credit is unstable because it is not well regulated like domestic credit in developed countries. Since the birth of capitalism there have been periodic financial crises with devastating consequences. To prevent its repetition, banks and financial markets have been subjected to regulations that have dealt with the last crisis and not the next, so that each new crisis has led to another advance in regulations. International credit works for convenience taking into account political, economic and social aspects. The weaker the interested country appears, the greater the guarantees it must present, unless it is appropriate for other reasons to grant it a loan in unfavorable situations.
Credit is part of the complex world of financial innovation, generating mutations in products, processes and services, seeking an effective response to the crisis conditions that have characterized the international economy. The support provided by new technologies has contributed in a fundamental way to this.
New generations of computers, telematics and integrated payment and communication systems, together with paperless contracting, using computerized records, have revolutionized the novel environment of international finance. The Swift I and II, Talisman, Globex systems, used by the monopoly of the risk rating agencies, are an example of the innovative capacity and the high financial technification, as far as credit analysis is concerned.
- FINANCIAL INNOVATION IN THE INTERNATIONAL FIELD
Financial innovation is considered as the strategic response of the markets to reduce their operating costs, business management and risk, making available to investors the flows of funds in national and international environments, here the premise to innovate or disappear.
Applying the technology life cycle curve, which is basically divided into four phases: emerging, growth, maturity and decline, where each one has its respective time assigned according to the type of product, the life cycle of financial products is short, they have a rapid tendency to obsolescence due to the cascade effect of innovations, which were derived from international financial crises. The supply and demand of financial products has led companies to analyze their financial needs in detail, which have been classified by the International Banking Regulation Report or "Cross Report" in 1986, in the following simplified way:
- Need for ongoing risk transfer: Variations in interest rates and exchange rates are controlled using reviewable loan techniques; contracts to hedge risks through swaps; Forward contracts such as options. Need to transfer credit risk: Securities financing methods, which transfer risk to the holder of the title; risk rating or rating techniques Need for liquidity growth in loans and investments: Innovations facilitate liquid, guaranteed and efficient markets Need to access new fund resources: Multiple currency securities, swaps and warrants Need increase of equity and risk capital: Options Markets; creation of second markets for SMEs; international equity markets; venture capital strategies.
According to the above classification, we can observe that these products can easily spread from one financial segment to another, from which the so-called synthetic instruments or Syntetic Securities are generated.
The international banking sector has shown a special sensitivity to financial instruments. A large part of the operations designed in this field have been developed in the financial institutions themselves in a dynamic of diversification that is both competitive and unbridled.
Its main incentive lies in the design of hybrid operations that, offering new possibilities, are almost always located off-balance-sheet. This favors the banking strategy itself in managing risk as a service provided to customers.
The philosophy underlying the futures and options markets has an innovative character, taking the Greek classics as a point of reference. Thales of Miletus, an expert in mathematics, was a pioneer in contracting options, acquiring the right to all the mills in his city in the hope of a good harvest. His forecasts were fulfilled and this generated significant benefits.
The American market and the Pacific markets will have strong competition with the European Union in the coming years, which bases its policies on the European Community Futures and Options Exchanges -ECOFEX-, as the regulator of the community market.
Free markets - OTC - offer other types of opportunities to companies, outside the framework of standardization and the guarantee of the Clearing House. Contracting tailored to user needs faces liquidity difficulties and requires greater knowledge of the market.
The use of similarly dangerous derivative instruments is widespread in money markets, but nothing has been done to discourage them. For example, knock-out options are canceled when a certain price limit is reached, leaving the option buyer uninsured. Knock-out options used to be very popular with Japanese exporters because they are cheaper than normal ones. Generally speaking, there are no margin requirements for derivatives, swaps and forward transactions, except when they are executed on registered exchanges.
Financial innovation is considered one of the main benefits of free markets, but because financial markets are unstable, financial innovations may be creating instability. Innovations bring intellectual excitement and benefits to innovators, but maintaining stability by preventing excesses must be a priority.
The global capitalist system, according to the economist George Soros, is like a gigantic circulatory system, drawing capital from the markets and financial institutions of the center and pumping it to the periphery, either directly in the form of credit and portfolio investments, or indirectly through multinational companies. According to the above, the Asian financial crisis has reversed the direction of the natural movement, now capital has begun to flee from the periphery.
The difficulties of the periphery cannot be good for the center, for three reasons according to Soros, 1999. Reason one: The Russian crisis has brought to light certain shortcomings in the international banking system that had not previously been addressed. In addition to their exposure on their own balance sheets, banks carry out swaps, forward transactions and transactions with derivative financial instruments, among themselves and with their clients. These transactions are not reflected in the balance sheets of the banks. They are constantly adjusted to market value, that is, they are constantly revalued and any difference between cost and market is offset by cash transfers. This is supposed to eliminate the risk of default. The swap markets,Forward transactions and derivatives are very wide and the margins are very low. The transactions form a garland with many intermediaries, and each intermediary has an obligation to his counterparts without knowing who else is involved. Exposure to individual peers is limited by setting up credit lines. This complex system was hit hard when the Russian banking system collapsed. Russian banks defaulted on their payment obligations, but western banks held out to their clients. No way was found to offset the obligations of one bank against those of another. Many hedge funds and other speculative accounts suffered such heavy losses that they had to be liquidated.A similar situation emerged shortly thereafter when Malaysia deliberately closed its financial markets to foreigners, but Singapore's monetary authority, in collaboration with other central banks, acted without delay. Outstanding contracts were recorded on a net basis and losses were shared. A possible collapse of the system was thus avoided.
Second reason: The pain of the periphery is so intense that some countries have begun to abandon the global capitalist system, or have fallen by the wayside. First Indonesia, then Russia, have suffered a complete crisis, but what has happened in Malaysia and to a lesser degree in Hong Kong may be worse. The crash in Indonesia and Russia was not wanted, but Malaysia deliberately dropped out. This country managed to inflict considerable damage on foreign investors and speculators and was able to obtain some temporary relief. The relief comes from lowering interest rates and injecting the stock market by isolating the country from the outside world. The relief can only be temporary because the borders are porous, and the money will leave the country illegally; the effects on the economy will be catastrophic.The measures taken by Malaysia will hurt the other countries trying to keep their financial markets open by encouraging capital flight. In this sense, Malaysia has undertaken the policy of getting rich at your neighbor's expense.
Third reason: This factor that favors the disintegration of the global capitalist system is the evident inability of the international monetary authorities to hold it together. IMF programs don't seem to work, the IMF has run out of money. The G - 7 response to the crisis in Russia has been woefully insufficient, and the loss of control has been absolutely dire.
This shows the need to rethink the strategy of international monetary entities, or to start a new path to strengthen the global capitalist system. The scenarios have changed, technology is advancing in giant steps and the response capacity of capital is falling short, affecting the companies that drive the economic development of each country. We are in a revolution in the financial sector in which the company must choose the instrument, the market and the strategy that best suits the needs, in order to cover its risks, reduce its costs and maximize its profits.
Financial innovations have their peculiarities in terms of their structure, their operation and even in the name. Let's see some examples:
- Tigers: Treasury Investment Growth Receipt, were created in 1982 by Merrill Lynch. They are coupon obligation titles, qualified in English as Stripping.Cats: Certificate of Accrual on Treasury Securities, created by the Salomon Brothers firm as financial obligation securities Lions: They are another variation of strips, created by the Lheman Brothers firm.Zebras: Zero-coupon Eurosterling Bearer Registered Accruing Securities, created by SG Warburg, as financial obligations Stags: Sterling Transferable Accruing Government Securities.Felin: State funds, free of nominal interest. Created by French banks, hedge funds are involved in a wide range of investment activities. They serve refined investors and are not subject to the regulations that apply to mutual funds.Managers are compensated on a performance basis and not as a fixed percentage of assets. Yield funds would be a more accurate definition
The objective of these financial innovations is to respond to a need of the moment without taking into account its duration in time. There are also Swaps, Euronotes facilities, Financial Futures and Options, among others.
This complex set of financial innovations cannot ignore International Bonds, with which countries and companies also seek to settle. They receive various names such as Yankee in the United States, Matador in Spain, Samurai in Japan and Bulldog in the United Kingdom, among others.
CONCLUSIONS
Innovation introduces great elements of complexity and interdependence in the global financial system. The competitiveness of companies is based on the incorporation of technological progress into their business processes. R&D resources dedicated to the service sector must create learning processes through practice, the use of complex systems or interaction (learning-by-doing, learning-by-using, learning-by-interacting).
There is a horizontal effect of information technologies, which support activities in the financial services sector.
With the technological revolution there are changes in institutions, in the ways of organizing work in companies, which changes the concepts of organizational models, personal relationships and commercial transactions.
In financial products, the technological cycle shortens, the flexibility to respond to demand intensifies with the development of new information technologies. This generates changes in competitive forces, motivating alliances between companies to stimulate technological synergies or to share core-competences.
Financial innovation does not suppress risk, it transfers, redistributes and diversifies it, although it reduces individual risks. It can generate a more rapid progression of the leverage effect, causing unknowns about the application of monetary policy techniques.
The lessons of the global financial crises must be learned to avoid subsequent disasters; countries must protect themselves and measure their exposure to risk according to their capacity to borrow and to produce domestic resources.
The capitalist system should not be above the moral principles that govern society because it will deteriorate by its own weight, even if they are commercial transactions, these are between institutions created and governed by people, which are part of a family and an environment that every time it has to humanize itself in favor of those who need it most.
BIBLIOGRAPHY
- COSTA RAN, Luis and FONT VILALTA, Montserrat. New financial instruments in business strategy. 2 ed. Madrid: ESIC, 1992. 531 p.DUEÑAS SÁNCHEZ, Henry. Technological management in the university - company relationship. Thesis. Barcelona: UPC, 1999. 119 p.MUNFORD, Lewis. Technics and civilization. New York: Harcout, 1998. 552 p.PORTER, Michael E. The Competitive Advantage of Nations. Buenos Aires: Verlap, 1991. 1,025 p.
Internet Commerce Broker –ICB-: One of the most used schemes is the internet stock broker, which collects supply and demand information, executes purchases and sales through the network. This system is designed to sell information, carry out transactions and promote electronic commerce.
The Nasdaq Stock Market ® announced a new system for the electronic display of quotes and purchase orders for securities listed on the Nasdaq. The Nasdaq WorkstationII ® (NWIITM) screen will be redesigned to include the new Nasdaq Order Display Feature or "Window", in order to increase transparency in the Nasdaq Stock Market. The proposal has been submitted to the Securities and Exchange Commission (SEC) for final approval.
«The Nasdaq Order Display Window will reinforce the position of Nasdaq ® as the true central market for Nasdaq securities, by improving the collection, grouping and display of information prior to trading, from both the« Market Makers »(creators markets or counterparty companies) and Electronic Communication Networks (CERs), »states Frank G. Zarb, Chairman of the Board of Directors and CEO of the National Association of Securities Dealers, Inc. (NASD ®) - parent entity from The Nasdaq Stock Market, Inc.
IMF: International Monetary Fund
WB: World Bank
Rating: Financial rating of an entity in the opinion of specialized agencies. There are short-term or Commercial Paper and long-term ratings. Global monopolies and oligopolies are beginning to emerge. Only in the world are there four large auditing companies; similar but less pronounced concentration occurs in other financial functions
Warrant Bonds: option certificates –warrants- that grant the optional possibility of acquiring another asset under predetermined conditions, their quotation depends on the price of the asset in the market.
Syntetic Securities: These are hybrid or combined financial instruments that allow an existing financial asset to be negotiated with a hedging transaction, such as interest rate swaps.
OTC Markets - Over The Counter -: Market whose securities transactions are carried out outside the Stock Exchanges and Organized Securities Markets. Over-the-counter markets, no physical location. They are also called Gré à Gré.
Stripping: Position in a series of expiration dates in financial obligations.
Swap: Liability obligation swap operation over time. The currency swap is a swap of operations in different currencies with equivalent values. The interbank swap is the exchange of a forward currency for another in cash.
Euronotes facilities: these are short-term securities issues, also called Euronotes, with maturities of one or two months, renewable through roll-over, and guaranteed in a Euro-credit called back-stop.
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