Write a 2 page essay on Bf Goodrich case. The counterparties find the exchange useful since one bank possessed a pool of fixed-rate assets that are funded with floating rate debts and vice versa. Thus, the banks would be well of with the payment streams that closely relate to their income streams (Chen, pp.45-78). Hence, swapping their interests payments make sense.
However, their failure to cure their asset/liability mismatches will put every party at a risk of losing their initial profitable