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Disputed derivative transactions – Santander and Pourtuguese Rail Operator
I happened to read today a news item on disputed derivatives transactions.
It is reported therein, the dealers settled a crop of disputed derivatives trades with Portuguese state owned entities last year with one exception – Santander...
Global FX Scandal
The thought for this post was triggered by the Foreign Exchange Committee sponsored by the Federal Reserve Bank of New York.
The Committee has recently observed in its 2014 March 26th meeting that order handling, hedging, disclosure policies...
Equity index and Designing an Index
Equity indexes are weighted baskets of individual stocks. The Equity Index is a value that is proportional to the market value of the individual stocks underlying the index. The value of the index changes as the values of the individual stocks...
Interest Rate Derivatives and their wrong sales to gullible customers
Banks are more in the news these days – for a variety of reasons with negative impact of course. Of all these, the one connected with mis-selling of interest rate derivative products is causing considerable damage.
The kind of allegations...
Foreign Exchange Exposures
Foreign Exchange exposure is a measure of the potential for a firm’s profitability, net cash flow and market value to change because of a change in exchange rates. An important task of the financial manager is to measure foreign exchange exposure...
Foreign Exchange Risk Management
The peculiarities of foreign exchange markets are
– An Over The Counter market
– Only market open 24 hours, seven days a week, 365 days a year
– No single location; no barriers
– ...
FX Forward Contracts
Forward Contract is a mechanism through which the rate is fixed in advance for purchase or sale of foreign currency at a future date. In such an arrangement, the risk of loss which might accrue on account of adverse movement in the rate of exchange...
Foreign Exchange Dealing Operations
If you buy a Binny Silk Saree for your wife (or girl friend!) at T.Nagar Chennai Nalli Silks, you will naturally want to pay for it with Indian Rupees and the Nalli Silks will want to be paid in Rupees because he pays all his bills with Rupees.
Likewise,...
Basic concepts in Foreign Exchange
Meaning:
The term foreign exchange is popularly referred to as the currencies of other countries. To an Indian, US Dollar is a foreign currency just as Indian Rupee to an American. Mr X, an Indian, receives a remittance of (say) USD 1000 from...
Gold Accumulation Plans in India
I should consider myself as very fortunate – I had the rare privilege to get associated ‘first’ with bullion banking in India when the official Gold policy was relaxed in the late 1990s and also to get associated with the first...
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