The association between the derivatives products and the financial risk management is quite substantial and significant - Dissertation Example

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The association between the derivatives products and the financial risk management is quite substantial and significant

In order to operate in an effective manner, the banks need to manage their assets and liabilities from the various risks prevailing in the economy, one of which is the interest rate risk. Interest rate risk is the risk to earnings or capital arising from movement of interest rates. The need to manage the interest rate risk is very crucial for any bank and it has generally been observed that the interest rate risk management form the integral part of the risk management policies of all major global banks. This dissertation analysis the effectiveness of “interest rate swaps” in managing the interest rate risk faced by the UK banks and also how these derivatives product improves financial outlook of these banks. For the purpose of conducting the study, a quantitative and qualitative analysis was conducted on a sample of 12 major UK based banks. ...
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Contents Executive Summary 1 Problem Statement 2 Research aim and objective 2 Research Questions 3 Dissertation Layout 3 Chapter: 1 Introduction to risk management 3 Risk Management Process 4 A background to Global Financial Risk Exposure and Hedging 5 Chapter: 2 Interest Rate Swaps 8 Characteristics of Interest Rate Swaps 8 Application of interest Rate Swaps 8 Valuation of SWAPS 10 Chapter: 3 Literature Review and Methodology 11 Literature Review 11 Research Methods and Data Collection 14 Chapter: 3 Analysis of the research 16 Chapter: 4 Conclusion 21 References 22 Executive Summary Banks and financial institutions have played a significant role in integrating the different economics of the …
Author : vreichel

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