INTEREST RATE DERIVATIVES IN DEVELOPING COUNTRIES IN EUROPE

Slobodan Cerovic and Marina Pepic
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Slobodan Cerovic: University of Singidunum, Serbia
Marina Pepic: University of Singidunum, Serbia

Perspectives of Innovation in Economics and Business (PIEB), 2011, vol. 9, issue 3, 38-42

Abstract: Financial derivatives (interest rate futures, options and swaps) are a very simple way to minimize interest rate risk and therefore are extremely popular. The value of interest rate derivatives transactions in the world is increasing dramatically. Unfortunately, this is not the case with developing countries in Europe. Although significantly increased in the last decade, interest rate derivatives markets in developing countries are still in nascent stage. In most developing countries still the main problem for the interest rate derivatives development is the lack of basic conditions, including inadequate measurement of interest rate risk exposure, underdevelopment of financial markets in general and especially of market instruments that underlying derivatives, weak and/or inadequate infrastructure and legal framework, misunderstanding and lack of experience in operations with financial derivatives and the complexity of the derivatives accounting

Keywords: Interest rate derivatives; developing countries; government yield curve; stabile macroeconomic environment. (search for similar items in EconPapers)
JEL-codes: G15 (search for similar items in EconPapers)
Date: 2011
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