Abstract Derivatives could be used by banking organizations and other entities both as risk management tools and as a source of revenue. On the other hand, however, derivatives themselves are related with significant risks, including credit risk, market risk, liquidity risk, operations risk and legal risk. The entity which is involved with derivatives should identify and assess relevant risk of its derivative activities timely by using scientific methods, and choose appropriate risk response tactics in accordance with the results of risk assessment and the risk appetite or tolerance of the entity.
|
Received: 19 January 2010
|
|
|
|