The Abstract:

• This paper focuses on the current loan sales, interest-rate swaps and credit derivatives, and investigates the changing business of U.S. money center banks after the 1980s. In these three financial products,
• we find in common that:
  1. a change in business occurred after financial crises;
     
  2. these three products transfer the risks of finance receivables to a third party and the transfer of risks came to occur step-by-step for each of three products; and
     
  3. as a result, the sources of revenues shifted from traditional interest income to noninterest income, or investment banking fees and trading revenue (the profit made on a position held for less than one year).
     
• This seems to be useful in explaining the source of U.S. money center banks' global earning power, which is the role of a market maker.

Keywords: money, center banks, changing business, loan sales, Interest-rate swaps, credit derivatives

Contents:

1. Earnings and Changing Business of Commercial Banks:
   
2. Loan Sales
   1. History of Loan Sales
   2. Motive of Loan Sales
   3. Summary
3. Interest-rate Swaps
   1. History of Interest-rate Swaps
   2. Motive of Interest-rate Swaps
   3. Summary
4. Credit Derivatives
   1. Current State of Credit Derivatives
   2. Motive of Credit Derivatives
   3. Summary
5. Concluding Remarks