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The Hedging of Interest Rate Risk in Enterprises’ Loans (Zabezpieczenie ryzyka stopy procentowej w kredytowaniu dzialalnosci przedsiebiorstw)

Author

Listed:
  • Monika Klimontowicz

    (Uniwersytet Ekonomiczny w Katowicach, Katedra Bankowosci i Rynkow Finansowych)

  • Anna Pyka

    (Uniwersytet Ekonomiczny w Katowicach, Katedra Bankowosci i Rynkow Finansowych)

Abstract

The improving economic situation, loosened credit policy of banks and a low level of interest rates foster the increase in enterprises’ credit obligations. Variable rates that are characteristic of those credits cause some difficulties in capital cost estimation resulting from the risk of interest rate increase. To meet enterprises’ expectations, banks are offering a range of products aimed at hedging such a risk. The purpose of the paper is to define the prerequisites for using interest rate hedging instruments in enterprises’ policies. It required characterising the nature of transactional risk resulting from interest rate changes, presenting financial instruments offered by banks operating on the Polish banking market and analysing advantages and threats connected with such transactions.

Suggested Citation

  • Monika Klimontowicz & Anna Pyka, 2018. "The Hedging of Interest Rate Risk in Enterprises’ Loans (Zabezpieczenie ryzyka stopy procentowej w kredytowaniu dzialalnosci przedsiebiorstw)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(27), pages 54-64.
  • Handle: RePEc:sgm:resrep:v:1:i:27:y:2018:p:54-64
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    More about this item

    Keywords

    interest rate risk; interest rate swap; forward rate agreements; currency interest rate swap; interest rate options;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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