Derivatives & Hedging For Mutual ADIs

Overview

Learn how to use derivatives to manage your interest rate risk.

The recent dramatic increase in interest rate volatility has led to a substantial increase in interest rate risk which can severely impact a Mutual's net interest margin. This, together with the increasing need to be able to offer members the full range of lending products, including fixed rates demands that Mutuals better manage their interest rate risk through the use of derivatives. This 1 day course covers the management of on balance sheet interest rate risk using derivatives as well as all aspects relating to using and controlling derivative activity.

What you will get out of this course:

• A detailed understanding of the nature of interest rate risk in a Mutual ADI's balance sheet
• An in depth knowledge of interest rate derivatives including interest rate swaps
• A knowledge of what is required to commence using derivatives and the related transaction flow including recording deals, deal confirmation, settlement and rate setting
• A knowledge of the key controls required over derivative hedging transactions
• An understanding of the hedge accounting requirements for derivatives under AASB 139, how to document hedges, test effectiveness and create accounting entries
• The knowledge of how to disclose derivative hedging transactions in the financial statements under AASB 7 and AASB 132
• An appreciation of the fair value of a derivative and what it represents
• An awareness of the risks relating to using derivatives and how to control them
• The ability to create a Derivatives and Hedging Policy
• The ability to incorporate derivatives into your risk reporting

Brochure: pdf

View course location: map

Contact: Andrew Tagg / David Tattam