, we conclude that swap positions are not economically significant in hedging the interest rate risk of bank assets …

We study a firm that justifies its novel use of equity derivatives as a cash-flow hedging strategy. Our purpose is to … hedging concepts articulated by Froot, Scharfstein and Stein (1993). In applying the theory to practice, there are lessons for …

We study how risk management through hedging impacts firms and competition among firms in the life insurance industry … face costly external finance increase hedging after staggered state-level financial reform that reduces the costs of … hedging. Post reform impacted firms have lower risk and fewer negative income shocks. Product market competition is also …

This paper addresses the question of how an institution might optimally manage the market risk of a given exposure. We … moneyness of the option as a function of the asset's distribution, the risk-free rate, and the VaR hedging period. We find that … the optimal strike of the put is independent of the level of expense the institution is willing to incur for its hedging …

In the face of rising interest rates in 2022, banks mitigated interest rate exposure of the accounting value of their … filings shows that only 6% of U.S. banking assets used derivatives to hedge their interest rate risk, and even heavy users of … derivatives left most assets unhedged. The banks most vulnerable to asset declines and solvency runs decreased existing hedges …