Wanted: swap dealers to work for department seven of the federal finance ministry in Bonn. Why? Because in November, the budget committee voted to allow the government to write interest rate swaps on its debt.
The purpose is to achieve greater flexibility in debt management, and also to lower the cost of borrowing as Germany tries to squeak inside the Maastricht criteria.
But the Bundesbank is not amused. At the budget committee hearing, Bundesbank director Johann Wilhelm Gaddum set out the view of the guardians of the German currency: there would be a "conflict of interest," he said, between the interest rate policy of the Bundesbank and the effect on interest rates of...
