As the subject of the discussion appropriately suggests, the recent global crisis has, indeed, posed “new” challenges for banks and end-users in managing currency and interest rate risks. Such new challenges have emerged due to excessive volatility both in terms of dimension and direction witnessed in almost all classes of financial assets.
Since banks and corporates are often required to take decisions that can impact them much later, such a state of excessive volatility makes it difficult for concerned economic agents to make optimal and informed decisions. Institutions, both financial and non-financial, have endured extreme levels of market volatility in recent years.