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The Rapid Growth of Financial Derivatives in the US Banking Sector
We discuss the rapid growth of financial derivatives, which continued even during the global financial crisis, with the majority of these transactions occurring among a small number of major US banks and their affiliated companies.
The Risks and Rewards of the Massive Market Derivatives Industry
We discuss how market derivatives help institutions reduce risk and protect against market volatility, allowing for more efficient operations. These contracts are mostly traded privately, with an estimated total value of 700 trillion globally, far exceeding the global GDP. However,...
Managing Financial Risks with Derivatives in the Global Financial Landscape
We discuss the importance of the global financial landscape for financial institutions like banks and insurance companies, and how they use financial derivatives to manage risks associated with interest rate fluctuations, exchange rate fluctuations, and credit risk in the financial...
The Crucial Role of Derivatives Markets in Corporate Risk Management
We discuss how derivatives markets based on five types of financial assets - interest rate derivatives, foreign exchange derivatives, credit derivatives, stock derivatives, and commodity derivatives - are used by around 90% of large companies in various industries to manage...
Understanding the Risks and Complexity of Derivatives
We discuss the complexity and high level of risk associated with derivatives. Derivatives contracts are financial arrangements whose value is derived from the performance of various market factors such as interest rates, exchange rates, commodity prices, stock prices, and credit...
The Growing Importance of Derivatives in Financial Markets
We discuss the increasing use of derivatives in the financial market, their purpose in hedging against risk and speculating on future market movements, as well as their role in providing liquidity and aiding price discovery for underlying assets.