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WHO USES DERIVATIVES – AND WHY? Derivatives play a critical role in helping to reduce the uncertainty that comes from changing interest rates and exchange rates, as well as credit, commodity and equity prices. at’s why they are used by thousands of companies in all industries and in all regions. By managing their risk and creating certainty, companies have the confidence to invest in future growth and job creation. at’s vital for global economic activity and growth. MANUFACTURING: Manufacturers use derivatives to help lock in the cost of issuing debt to finance new investments and plants, which contributes to growth and job creation. EXPORTING: Exporters use derivatives to achieve certainty in the rate they can convert future overseas revenue, which creates stability and keeps them competitive. FOOD PRODUCTION: The agricultural businesses that produce food and the companies that bring it to store use derivatives to manage the risk of fluctuating crop, livestock and fuel prices. Uses and Benefits More Uses and Benefits www.isda.org ©2017 International Swaps and Derivatives Association, Inc.

WHO USES DERIVATIVES – AND WHY?=/Uses and...Uses and Benefits Title Uses and benefits Fact sheet.indd Created Date 4/19/2017 12:59:00 PM

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Page 1: WHO USES DERIVATIVES – AND WHY?=/Uses and...Uses and Benefits Title Uses and benefits Fact sheet.indd Created Date 4/19/2017 12:59:00 PM

WHO USES DERIVATIVES – AND WHY?

Derivatives play a critical role in helping to reduce the uncertainty that comes from changing interest rates and exchange rates, as well as credit, commodity and equity prices.

That’s why they are used by thousands of companies in all industries and in all regions. By managing their risk and creating certainty, companies have the confidence to invest in future

growth and job creation.

That’s vital for global economic activity and growth.

MANUFACTURING:

Manufacturers use derivatives to help lock in the cost of

issuing debt to finance new investments and plants, which contributes to growth and job

creation.

EXPORTING:

Exporters use derivatives to achieve certainty in the rate they can convert future overseas revenue, which

creates stability and keeps them competitive.

FOOD PRODUCTION:

The agricultural businesses that produce food and the

companies that bring it to store use derivatives to manage the risk of fluctuating crop, livestock

and fuel prices.

Uses and Benefits

More Uses and Benefits

www.isda.org©2017 International Swaps and Derivatives Association, Inc.

Page 2: WHO USES DERIVATIVES – AND WHY?=/Uses and...Uses and Benefits Title Uses and benefits Fact sheet.indd Created Date 4/19/2017 12:59:00 PM

www.isda.orgISDA® is a registered trademark of the International Swaps and Derivatives Association, Inc.

ENERGY:

Explorers, producers and distributors of energy use

derivatives to manage changes in energy prices and reduce

volatility for consumers.

TRANSPORT:

Airlines use derivatives to hedge fuel costs, which helps to keep

ticket prices more stable.

FINANCIAL SERVICES:

Banks use derivatives to manage their interest rate

risk, enabling them to expand lending to individuals and

businesses.

PENSIONS:

Pension funds use derivatives to manage interest rate and

inflation risk to protect the value of pension pots for future retirees.

MORTGAGE PROVIDERS:

Derivatives allow mortgage providers to offer a choice of fixed-rate and floating-rate

mortgages.

INSURANCE:

Insurance companies use derivatives to ensure premiums paid by customers are sufficient to meet future insurance claims.

Derivatives play a vital role in helping companies across the globe mitigate risk – creating the certainty needed for economic growth.

Uses and Benefits