Dynamic hedging and Microprudential: Difference between pages

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''Options trading and hedging.''
''Bank regulation''.


Dynamic hedging recognises that the hedge ratio depends - among other things - on the current market price of the underlying asset.
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.


So that as the underlying market price changes, the amount of the hedging instrument held needs to be adjusted dynamically, in line with the changing hedge ratio.


== See also ==
== See also ==
* [[Hedge ratio]]
* [[Capital adequacy]]
* [[Market price]]
* [[Macroprudential]]

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