This executive summary reports the findings from an investigation into the interest rate risk management (IRRM) practices of UK firms. It is based on a more detailed report of the same name. Details of where to find this can be found at the end of this executive summary.
Risk has become very prevalent in society and responsibility for the management of risk, in the guise of corporate governance, has hit the headlines after many recent scandals. Financial risk, in particular, has dominated the discussion in the media, which has focused on the use of fraudulent financial transactions, special purpose vehicles and accounting abuses. Financial risk has also hit the headlines as a result of derivative transactions that are normally used to reduce or hedge risk not working as anticipated, such as at Orange County and Gibsons Greetings.The illegal use of derivatives by rogue traders such as Nick Leeson at Barings Bank and John Rusnak at Allied Irish Bank have further served to concentrate the spotlight on corporate risk management practices.
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