New methods for savings and loans to hedge interest rate risk

Thomas J. Merfeld and Charles Morris

Economic Review, 1988, vol. 73, issue Mar, 3-15

Abstract: Increased interest rate volatility in recent years has led to a greater volatility in profits at savings and loan associations. To help stabilize their profits, some S&L's are implementing interest rate hedging programs. These programs use financial instruments such as interest rate swaps, financial futures and options on financial futures. Because hedging programs introduce their own risks, S&L's should thoroughly examine all aspects of the programs before employing them.

Keywords: Hedging (Finance); Savings and loan associations; Interest rates (search for similar items in EconPapers)
Date: 1988
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