Two banks quote the same 10yr swap 15 bps apart. Neither is ripping you off, and neither is doing you a favour.
The market level for a swap is public. The gap between two quotes is each bank's cost of carrying your trade: counterparty risk, funding and regulatory capital.
Those costs depend on what the bank already has on with you. The same swap can use up capital at one bank and release it at another.
Ask each bank what is driving its charge on the trade. Few clients do.
What you are actually paying for
The mid is public. What you are actually paying for is what the trade does to each bank's balance sheet: the counterparty risk, funding and regulatory capital that sit behind every derivative price, and none of those are properties of your trade alone. They are properties of your trade plus everything already in the netting set between you and that bank.
The same swap costs each bank a different amount
Which is where it gets interesting. The same swap can consume capital at one bank and release it at another, purely because of what it offsets. Your trade might extend one dealer's exposure to you and partially cancel another's. Same instrument, materially different cost of manufacture. The cheapest quote on your panel is rarely a bank sharpening its pencil for the relationship. It is often the bank where your risk nets down.
What the gap between quotes tells you
Not every gap is a netting story, to be fair. Appetite moves quotes too: a bank cool on a sector, or short of capital budget for the quarter, will price accordingly, and a wide enough number is a polite no. Either way, dispersion is information. Tight quotes mean the market agrees what your trade costs to carry. Wide quotes mean the banks disagree, about the cost or about wanting it, and no pitch deck will tell you as much about each relationship. The question that unlocks it is one banks seldom hear: what is driving your charge on this trade?
I can count on one hand the clients who have asked me that. Every one of them paid less.
First published as a LinkedIn post on 26 August 2026. Read and comment on LinkedIn.