Editing Interest rate swap (section)

{{Short description|Linear interest rate derivative involving exchange of interest rates between two parties}}
In [[finance]], an '''interest rate [[swap (finance)|swap]]''' ('''IRS''') is an [[interest rate derivative|interest rate derivative (IRD)]]. It involves exchange of interest rates between two parties. In particular it is a [[Interest rate derivative#Linear and non-linear|"linear" IRD]] and one of the most [[Market liquidity|liquid]], benchmark products. It has associations with [[forward rate agreement|forward rate agreements (FRAs)]], and with [[zero coupon swap|zero coupon swaps (ZCSs)]].

In its December 2014 statistics release, the [[Bank for International Settlements]] reported that interest rate swaps were the largest component of the global [[Over-the-counter (finance)|OTC]] [[Derivative (finance)|derivative]] market, representing 60%, with the [[notional amount]] outstanding in OTC interest rate swaps of $381 trillion, and the gross market value of $14 trillion.<ref>{{cite web|url=https://www.bis.org/publ/otc_hy1504.pdf|title=OTC derivatives statistics at end-December 2014|publisher=Bank for International Settlements}}</ref>

Interest rate swaps can be traded as an index through the [[FTSE MTIRS Index]].