International Derivative Markets

Felix I. Lessambo
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Felix I. Lessambo: Fordham University

Chapter Chapter 8 in International Finance, 2021, pp 97-115 from Springer

Abstract: Abstract Derivatives improve the efficiency of financial markets and, by permitting more financial risks to be hedged, may permit some borrowers more access to sources of funds. Derivatives are a double-edged sword in that (i) they can be used to manage risk, and (ii) they can become financial weapons of mass destruction if used solely for speculative purposes. Managing derivatives positions has shown to be tricky since only a small amount (“margin”) is needed to establish a position. That may hide the full extent of a firm or bank financial obligations.

Date: 2021
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DOI: 10.1007/978-3-030-69232-2_8

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