TOKYO, JAPAN, WEDNESDAY APRIL 9, 2003 - At its annual general meeting today, the International Swaps and Derivatives Association announced the results of a survey of derivatives usage by the world’s 500 largest companies.
According to the survey, 92% of these companies use
derivative instruments to manage and hedge their risks more effectively. The companies using derivatives are located
in 26 countries around the world and represent a broad variety of industries,
ranging from aerospace to wholesalers of office and electronic equipment.
Of the companies using derivatives, 92% use them to
help manage interest rate risk. This represents 85% of the total sample.
85% of the companies (78% of the total) use derivatives to help manage
currency risk, 25% (23.5% of the total) to help manage commodity price
risk and 12% (11% of the total) to help manage equity price risk.
On a geographic basis, 94% of the 196 U.S. companies included among the world’s 500 largest use derivatives, as do 91% of the 89 Japanese companies, 92% of the 37 French companies, 100% of the 35 U.K. companies, and 94% of the 34 German companies.
“The survey demonstrates that derivatives today are
an integral part of corporate risk management among the world’s leading
companies,” said Robert Pickel, executive director and chief executive
officer of ISDA. “Across geographic
regions and industry sectors, the vast majority of these corporations
rely on derivatives to hedge a range of risks to which they are exposed
in the normal course of business.” About the Survey The survey was conducted by ISDA in March and April,
2003 and covers the world’s 500 largest companies ranked by revenues
as of year-end 2001. Of the
500, three no longer exist as independent companies and are excluded
from the results. In conducting the survey, ISDA examined publicly
available information, including annual reports and regulatory filings.
Companies for which no disclosure is available are counted for
purposes of the survey results as not using derivatives.
About ISDAISDA is the global trade association representing leading
participants in the privately negotiated derivatives industry. ISDA
was chartered in 1985, and today has more than 590 member institutions
from 46 countries on six continents. These members include most of the
world's major institutions that deal in privately negotiated derivatives,
as well as many of the businesses, governmental entities and other end
users that rely on over-the-counter derivatives to manage efficiently
the financial market risks inherent in their core economic activities.
Information about ISDA and its activities is available on the Association's
web site: www.isda.org.
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