Dynamic forward contract and Microprudential: Difference between pages

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imported>Doug Williamson
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imported>Doug Williamson
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''Risk management - foreign exchange.''
''Bank regulation''.


A dynamic forward contract is a foreign exchange forward contract that provides additional flexibility to the party hedging its foreign exchange risk.
The part of the regulatory framework which is designed to enhance the safety and soundness of individual financial institutions, rather than the financial system as a whole.
 
This effectively provides an option - or options - in favour of the hedger.
 
 
The option may be paid for by:
 
*An up front premium;
*An adverse forward rate in the contract, compared with the current market forward rate; or
*A combination of these.
 
 
:<span style="color:#4B0082">'''''Corporates act to mitigate FX volatility'''''</span>
 
:Payment fintech Moneycorp suggests a number of ways in which corporates can mitigate the impact of FX exposure...
 
:Make use of forward contracts: Forward contracts, either fixed or dynamic, can be customised to allow companies to lock an exchange rate for a future overseas payment.
 
:''Philip Smith, editor, The Treasurer online - 14 October 2022.''




== See also ==
== See also ==
* [[Bilateral]]
* [[Capital adequacy]]
*[[Contract]]
* [[Macroprudential]]
* [[Deal contingent forward]]
* [[Derivative instrument]]
* [[Fixed forward contract]]
* [[Fixing instrument]]
* [[Foreign exchange forward contract]]
* [[Foreign exchange risk]]
* [[Forward contract]]
* [[Forward discount]]
* [[Forward exchange market]]
* [[Forward foreign exchange rate]]
* [[Forward margin]]
* [[Forward market]]
* [[Forward points]]
* [[Forward premium]]
* [[Forward price]]
* [[Forward rate]]
* [[Futures contract]]
* [[Hedging]]
* [[Risk management]]
* [[Risk response]]
* [[Transfer]]
 
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 05:55, 27 March 2016

Bank regulation.

The part of the regulatory framework which is designed to enhance the safety and soundness of individual financial institutions, rather than the financial system as a whole.


See also