Interest rate swaps and cross-currency swaps:
A) appear on the balance sheets of commercial banks as current assets.
B) appear on the balance sheets of commercial banks as current liabilities.
C) appear on the balance sheets of commercial banks as long-term liabilities.
D) represent a contingent liability for an intermediary.

Question

Quizplus · Accepted Answer

Interest rate swaps and cross-currency swaps are considered off-balance sheet items and represent contingent liabilities for an intermediary. They do not appear as current or long-term assets or liabilities but may require future cash flows based on certain conditions.

Interest Rate Swaps and Cross-Currency Swaps