Key control indicator and Over night index average rate: Difference between pages

Latest revision as of 21:07, 1 July 2022

(ONIA).

Overnight index average rates are calculated and published for a number of different currencies and markets.

For example SONIA (for sterling), EONIA and EURONIA (for euro).

There are also many others including for example CZEONIA (Czech Over Night Index Average).

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-(KCI).
+(ONIA).
-A measure derived from a risk budget and key risk indicators, for the purposes of control.
+Overnight index average rates are calculated and published for a number of different currencies and markets.
-==== Example ====
-A Inc operates in the capital goods sector and regularly makes tenders in foreign markets. The tenders are based on foreign exchange rates prevailing at the time of bid but there is risk in the tenders which is difficult to hedge because there is uncertainty over whether the tenders will be accepted.
+For example SONIA (for sterling), EONIA and EURONIA (for euro).
-A Inc measures the number of bids outstanding and other key factors including the volatility of the currency pairs involved in the tenders to produce an overall measure of risk for tenders. The risk in tenders is then given a budget for overall risk, which is managed by the tendering team and their treasury colleagues.
-A Inc converts this budget to a key control indicator, adding up maximum exposure to any one currency pair, adjusted for volatility (and time) to meet the risk budget requirements.
+There are also many others including for example CZEONIA (Czech Over Night Index Average).
 == See also ==
-*[[Risk budget]]
+* [[EONIA]]
-*[[Key risk indicator]]
+* [[EURONIA]]
-*[[Key performance indicator]]
+* [[SONIA]]
+[[Category:Financial_products_and_markets]]