2012 Corporate Survey Results

Key findings

  • 74% use derivatives, of which 81% use only OTC derivatives or in combination with exchange-traded derivatives.
  • Spreadsheets are still the most commonly used method for derivatives valuations. 62% use them to value their derivatives, while 41% reported using counterparties as another method; 22% mentioned using a Treasury Management System.
  • Ease of use (76%) and cost effectiveness (72%) are important or very important aspects of a valuation system.
  • The biggest challenge that corporate respondents faced was hedge effectiveness (28%), with accurate risk assessment (26%) being a close second.
  • Most respondents (75%) are complying with hedge accounting regulations. However, most of these respondents (70%) are managing or testing their hedge relationships using spreadsheets. Approximately 41% are using a hedge accounting system and 14% are using the critical terms/short-cut method.
  • Fewer respondents made adjustments to their risk management strategy in 2012 (35%).
  • Despite being an important component of risk management, fewer respondents reported calculating CVA as part of their derivatives valuation (34%).
  • As regulations start to take shape, fewer expect that the changes will have a major impact (2%). However, most identified that the impact will be moderate and some notable changes will need to be made (34%).
  • More respondents expect to decrease their IT expenditure or keep it the same for 2012 (65%).

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