Managing Derivative Risks The Use and Abuse of Leverage Lillian Chew When Barings, the oldest merchant bank in the United Kingdom, collapsed it joined the long list of financial disasters that have involved derivatives. Procter & Gamble, Metallgesellschaft and Orange County have all fallen famously foul of these instruments. But are they really so dangerous? Promoters of derivatives rightly argue that they provide a service, helping to manage risk in increasingly volatile markets. Where large losses have occurred, it is because derivatives have been misused through greed, a lack of understanding of their risks and the failure of management to control properly those who deal in them, or all three. This book cuts through the hysteria and hype and explains in non-technical terms the unique risks of derivatives. These risks are discussed using actual examples, particularly the high-profile cases of the early 1990s. Managing Derivative Risks also discusses topical issues such as Value at Risk and the latest Bank for International Settlements’ capital requirements for market risk. It will prove a valuable source of information for finance directors, treasurers, institutional investors, fund managers, bankers, regulators, and anyone who sits on a corporate board.
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Despite several well-publicized disasters, the use of derivatives in managing financial risk at the corporate level is growing. This book cuts through the hysteria and hype to explain in simple terms what derivatives are and how the financial leverage they offer can effectively be used. Demonstrates how derivatives have been misused and provides proven strategies to successfully manage and profit from them. Includes numerous authentic examples plus interviews with practitioners.From the Inside Flap:
Managing Derivative Risks uses familiar analogies to explain the complex risks of derivatives, and how to manage them. Derivatives are sold to consumers as risk-management tools, but they bring their own risks. This point seems to be ignored by some end-users, blinded as they are by the brilliance of a structure that promises them something for nothing. At the other end of the spectrum are those who doggedly refuse to see the virtues of such instruments and thus deprive their shareholders of the demonstrable benefits of such tools. Managing Derivative Risks seeks to help both groups understand the risks and rewards of instruments which will shape finance in the coming millennium.
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Book Description John Wiley & Sons, 1996. Hardcover. Book Condition: New. 1. Bookseller Inventory # DADAX0471956228