Swaps are contracts in which two parties agree to exchange payments based on fluctuations in interest rates or other benchmarks. If firms in separate countries have comparative advantages on interest rates, then a swap could benefit both firms.

The Treasury is keeping an eye on the practices to determine if they pose any risks to parent companies in the United States, the report said. (http://on.wsj.com/YBNsTz)

Banks like Citigroup Inc (>> Citigroup Inc), Goldman Sachs Group Inc (>> Goldman Sachs Group Inc), JPMorgan Chase & Co (>> JPMorgan Chase & Co.) have revoked their policy of guaranteeing some swaps issued by foreign affiliates, primarily in London, eliminating ties to their U.S. parent, the report said.

Representatives of the Treasury were not immediately available to a mail seeking comments outside regular U.S. business hours.

(Reporting by Arnab Sen in Bangalore; Editing by Gopakumar Warrier)

Stocks treated in this article : Citigroup Inc, JPMorgan Chase & Co., Goldman Sachs Group Inc