Talk:Covered interest arbitrage

This article does not mention the persistent long-term violation of covered interest parity since 2008. See https://www.bis.org/publ/qtrpdf/r_qt1609e.htm

The Fed is paying higher interest on dollars than the banks would make by lending dollars to counterparties thus the counterparties print local currency to swap into dollars. Free lunch, because the interest from the Fed comes by administration not the market, and currency swaps give dollar holders a regulation-free way to make riskless profits over lending. Upshot: the law that covered interest parity must hold has been broken for a decade and this article is ignoring that out-the-window reality. — Preceding unsigned comment added by 2601:600:817F:A61A:E126:17DE:4B2E:F215 (talk) 07:00, 2 March 2018 (UTC)