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Derivatives

Siemens Predicts Other Corporates Will Start Hedging Credit

Several years after it entered its first credit derivatives Siemens Financial Services is still one of the only corporates that hedges its credit risk, but Ralf Lierow, director in Munich, thinks that is going to change.

Several years after it entered its first credit derivatives Siemens Financial Services is still one of the only corporates that hedges its credit risk, but Ralf Lierow, director in Munich, thinks that is going to change.

Lierow believes that in the coming years the rating agencies will look at how corporates manage risk and reward them accordingly. He added, however, that this could take five years. In addition, equity and bond investors will start to reward companies for hedging their credit risk.

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