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Effective balance sheet hedging in the current climate

Date:
June 8, 2020
  • greg martell headshot

    Authors

    Greg Martell

    Director
    Balance Sheet Risk Management

    Financial Institutions | Kennett Square, PA

Summary

In a piece written for BAI, Greg Martell highlights how current market conditions present financial institutions, equipped with the proper tools and strategy, with opportunities that can provide some welcomed relief during this period.

Even before the coronavirus pandemic escalated in early March, market participants expected that there would soon be a decline in interest rates. Many assumed that the late stage of the business cycle would be the impetus for the decline, leading to a possible recession in 2021. To prepare for this market event, many began implementing hedging strategies, lengthening the duration of floating-rate assets.


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Contact Chatham to discuss effective balance sheet hedging strategies.

About the author

  • Greg Martell

    Director
    Balance Sheet Risk Management

    Financial Institutions | Kennett Square, PA


Disclaimers

Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit chathamfinancial.com/legal-notices.

Transactions in over-the-counter derivatives (or “swaps”) have significant risks, including, but not limited to, substantial risk of loss. You should consult your own business, legal, tax and accounting advisers with respect to proposed swap transaction and you should refrain from entering into any swap transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss. This material has been prepared by a sales or trading employee or agent of Chatham Hedging Advisors and could be deemed a solicitation for entering into a derivatives transaction. This material is not a research report prepared by Chatham Hedging Advisors. If you are not an experienced user of the derivatives markets, capable of making independent trading decisions, then you should not rely solely on this communication in making trading decisions. All rights reserved.

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