• Icon to change language to english
  • Icon to change language to english

THE IMPORTANCE OF FINANCIAL DERIVATIVES IN A PHASE OF FINANCIAL UNCERTAINTY AND GLOBAL RECESSION

Authors

Keywords
Financial derivatives, credit derivatives, short sales, open interest, daily turnover

Summary
The scale of the importance of financial derivatives can be judged by many indicators, including: extremely fast and versatile development; the sum of outstanding positions in derivatives, which transitory value exceeds from 6 to 10 times the gross annual production of all economies in the world; the attractive income opportunities and unique techniques for risk management. In the same time, there are extreme opinions in which the financial derivatives are blamed for the global financial crisis and huge losses of various types of market players. The present study attempts to find and outline the real importance of financial derivatives for investment activity and global economy in the period from the beginning of financial crisis and the subsequent economic recession. Analyzed manifestations of financial derivatives in key events in recent years have shown their crucial role in „early diagnosing” of the global economic crisis, and their positive impact on capital market and indirect support to real economic sectors in a phase of recession. The methodology includes correlation study between derivatives, stock market and macroeconomic indicators.

JEL: G14
Pages: 34
Price: 3 Points

More titles

  • INVESTIGATION AND ANALYSIS OF INVESTMENT RISK IN A CRISIS

    The management of investment projects is related to the formation of such an investment portfolio, which would guarantee them the highest financial return. The main characteristic of investments is the „risk-return” ratio. The interdependence between these two categories is generally directly proportional – i.e. the pursuit of higher returns ...

  • ANALYSIS OF BULGARIA’S SPECIALIZATION IN THE FIELD OF FOREIGN TRADE IN AGRICULTURAL PRODUCTS

    The present survey aims to study the dynamics of the foreign trade flows of agricultural products between Bulgaria and the other EU Member States, the Balkan countries and the former members of CEFTA (until 2007). Using a methodological toolbox the author measures the degree of trade specialization of our country in the field of import and export ...

  • INCOMES, CONSUMPTION AND ECONOMIC GROWTH

    Eeconomic growth can be influenced by a number of factors, but certainly among the most important ones are the incomes and consumption of the population. An increase in incomes leads to increased consumption, which in turn, stimulates pro-duction, i.e. the creation of more goods and services and therefore causes an increase in the volume of gross ...