More fundamentally, both firms and banks have become increasingly aware of the need to optimize their capital and liability structures to adapt to changes in the economic environment. For firms this involves carefully assessing the risks and returns associated with projects, as well as recognizing the need to achieve an optimal structure in terms of their relative holdings of capital and interest-bearing liabilities.
Authorised dealers have been permitted to use innovative products like cross-currency  4  BIS Review 55/2007  options, interest rate swaps (IRS) and currency swaps, caps/collars and forward rate agreements (FRAs) in the international forex market. There has also been significant improvement in market infrastructure in terms of trading platform and settlement mechanisms.