RMontgomery

beginning of all swaps - since the two sides are equated to have a 0 value - there is no immediate credit risk, but potential credit risk is present.

In an IR SWAP and Equity Swap ->
towards the middle of the swap - potential credit risk is the highest. (since there are a lot of payments still left to be swapped, and if a party is already in trouble, that is not going to reduce).

This risk belongs to the party that is to get the positive payoff.

FX Swap:
Credit risk is highest towards the end of the swap - since the principal payments need to be swapped in the opposite currency at the end, unlike in an IR or Equity Swap.

CP