Another important distinction between futures and forwards is that the futures exchange guarantees to each party the performance of the other party, through a mechanism known as the clearinghouse. This guarantee means that if one party makes money on the transaction, it does not have to worry about whether it will collect the money from [...]
Archive of posts filed under the Banking category.
ACCURACY OF CORPORATE LOSSES
Risk management is a hugely information-hungry process. Keeping an up-to-date record of banking or fund winners and losers is a data-intensive exercise. Completeness and the accuracy of the data are the bedrock for corporate scrutiny. Banks can be strange animals when it comes to releasing data; they may not even be fully aware of their [...]
CORPORATE MISGOVERNANCE
If the risk-averse investor continues to park good money with bad company directors, what can be done to protect the innocent? The investor has to be both reasonable and proactive. We have seen the pitfalls from the side of the financial experts who have lost investors’ money, partly from a lack of proper communication. This [...]