Finance & ALM
Interest-Rate Hedging
Advisory, execution, valuation, and accounting services for instruments used to change interest-rate exposure.
Buying context
Why it matters
A hedge can reduce one exposure while adding basis, liquidity, counterparty, valuation, and accounting complexity. The bank needs independent understanding of the objective and plausible behavior under stress.
Due diligence
Questions to ask
- Which measured exposure is the transaction intended to change, and how will effectiveness be monitored?
- What collateral, termination, basis, counterparty, and liquidity risks arise under stressed rates?
- How are dealer compensation, execution price, independent valuation, and ongoing fees disclosed?
- What documentation and testing are required for the intended accounting treatment?
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Company listings
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