THE INNOVATIONS ON THE FINANCIAL MARKETS USING DERIVATIVES FOR BANKING MARKET RISK COVERAGE

Derivatives are used for speculative purposes and to reduce the risks manifested on financial markets. Banking market, due to the high volatility of exchange rate and interest rate derivatives are frequently used to cover the risk associated with lending. Contracts such as options on the exchange rate of national currency, swaps - on interest rate exchange, forward on the interest rate, swaps and options on interest rates, banks enable unbundling credit risk and the funding market and credit risk transfer, and keeping its ownership.