83 Percent of Companies are Using Financial Derivatives to Hedge Their Risk

VANCOUVER, British Columbia and NEW YORK, Nov. 9, 2010 /PRNewswire/ -- FINCAD, the leading global provider of financial analytics released the results of its 2010 FINCAD Corporate Finance Survey.

The survey found that corporates are continuing to use derivatives.  However, as a result of the financial crisis more corporate treasuries have taken measures to adjust their risk management strategy with increasingly required checks and balances in place.  Corporates are now more proactive in implementing industry best practices.  Most corporate treasuries use a third-party solution to value their derivatives with some using multiple vendors to benchmark their valuations.  In addition, 44 percent are now running scenario/sensitivity analysis and 40 percent are calculating Value at Risk (VaR).  

The results also demonstrate that over 45 percent of corporates need to calculate CVA for their derivatives valuations. This is significantly up from last year when very few companies were required to run CVA.  

"The financial crisis has demonstrated that relying on counterparty prices is no longer acceptable as more robust risk management practices are being put into place," said Bob Park, President and CEO, FINCAD. "More than ever, auditors are requiring their corporate clients to conduct independent third-party valuations of their derivatives to validate their counterparty prices in order to comply with current regulatory standards."

For a full summary of the 2010 FINCAD Corporate Finance Survey results, visit www.fincad.com/CorpSurv.

Also to find out how auditor-ready and optimized your risk management process is, complete the FINCAD Derivatives Transparency Scorecard^™ www.fincad.com/DTS.

About FINCAD

Founded in 1990, FINCAD provides software and services supporting the valuation and risk management of cross-asset class derivatives and fixed income securities to banks, corporate treasuries, asset management firms, auditors, and governments. FINCAD is the industry standard for financial analytics used by more than 4,000 organizations in over 80 countries. Over 70 FINCAD Alliance Partners embed FINCAD analytics within their solutions. FINCAD provides sales and client services from Dublin, Ireland and Vancouver, Canada. www.fincad.com

SOURCE FINCAD

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