Designing strategies for hedging

Greg Major, regional head of derivative marketing, Asia Pacific for ABN Amro, on derivatives and risk management.

If you read the job description of just about any treasurer or CFO it will centre on being a strategic designer of matters financial hedging, funding and interest cost reduction. In the days prior to the broad-based application of derivatives, pursuit of any one of the above would bring about typically uncontrollable consequences in the other two.

For instance, if a company's main source of financing was floating rate bilateral loans from banks, it was exposed to the consequent...

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