Innovative Financial Instruments-Cause and Solution for Financial Crisis?

Nowadays, even if financial instruments have a bad reputation in the context of financial crisis, they represented a way to control risks. So, we can’t ignore it especially because now, attention is played on innovative signals. Advantage for derivatives is the value changes in response to changes in a underlying, little or no initial investment is required, and settlement takes place at a future date. Weather derivatives can be used by organizations or individuals as part of a risk management risk management strategy to reduce risk associated with adverse or unexpected weather conditions. This paper explains the mechanism of such a derivatives use to the hedging of weather risks. The research methodology is the past experience and case study research cause its importance in the field of business and risk management. Results would be useful to managers in agriculture, tourism or assurance industry, and also to finance programs students.