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  3. q2 2016: the use of derivatives by banks for hedgi

Q2 2016: The use of derivatives by banks for hedging, trading and speculation has been the subject of...

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Finance

Q2 2016:

The use of derivatives by banks for hedging, trading andspeculation has been
the subject of great debate by regulators, customers and otherstakeholders.
Critically evaluate a bank’s use of financial derivatives and thebenefits and risks
this generates for both the bank and other stakeholders in thewider financial
system.

Answer & Explanation Solved by verified expert
4.0 Ratings (588 Votes)
The major function of a bank is to take deposit money from the people and then lend the same to users of funds for the purpose of business etc However there are periods in an economy where the interest rate is very low and thus banks are not able to generate enough profits for themselves In order to remain competitive and earn profits banks do    See Answer
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