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Where is that Y coming from? The rates of say EUR and CHF diverging?
by wrzuteczka 6y ago
Where is that Y coming from? The rates of say EUR and CHF diverging?
- gen220 6y agoYes. If CHF outperforms EUR, and the mortgage payments are in CHF, a bank that has most expenses in EUR is making a profit. You can hedge against the performance of CHF by keeping proportional revenue streams of EUR.
- Chickenosaurus 6y agoThis theory doesn't make sense to me. Banks could simply buy foreign currency to achieve the same without the additional risk of defaulting lenders.