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To: The Wharf who wrote (10247)	11/14/2007 3:25:13 PM
From: The Wharf	Respond to of 24758

cfo.com Basket Case A new synthetic currency could limit the volatility in foreign exchange trading, as long as it doesn't overcomplicate matters. For companies that borrow in yen or other low-interest currencies, such as the Swiss franc, this volatility poses unwelcome problems. Barclays Capital figures it has come up with a solution in the form of a new synthetic currency, the European Borrowing Unit. A basket of short and long positions in 10 currencies versus the euro, the EBU carries a 0% interest rate and aims to limit volatility by rebalancing its portfolio every month. Andy Kaufmann, co-head of FX structuring at Barclays Capital, expects the first EBU-denominated borrowings in a matter of weeks. The currency will appeal mainly to companies looking to hedge bond issues in yen or Swiss francs, offering "lower funding costs without as large long-term risks," he says. cfo.com

To: The Wharf who wrote (10247)	11/14/2007 5:22:57 PM
From: frankw1900	Read Replies (1) \| Respond to of 24758

This is an entirely different concept than prior times where the cost was based on extent of the risk and price of loans was high because of the possibility of negative return. This isn't really any different from the kind of activity that was going on thirty years ago, except for the means of expressing stupidity and cupidity. Then banks were sending freshly minted MBAs around the world to loan bags full of money to tin pot governments because in the words of a very prominent banker, who obviously never read any history, "Sovereigns don't default," or something like that. Well, they did. It has been and is my belief C$ is also at risk. At risk of what? For decades it was way below par with the $US. Right now, it's not. What's the problem? Things change.