Subsiciary AG Management

Interest rate management one of the strengths of the first Subsiciary AG interest rate management has been operated before the invention of the derivative. The prospects for future development, interest was reflected in investment and financing decisions on the choice of a fixed or a variable rate of interest. Called also futures, forward/forward, allow the interest rate risk due to the structure of the existing credit balance sheet counter business to. These traditional financing instruments, however, have the disadvantage that they always move capital flows and immediately record-extending impact thus. The modern instruments of interest rate risk are interest rate derivatives, which allow a balance of neutral interest rate management. Interest rate decisions can be made without direct impact on the Liquiditatssphare. The advantages of the new instruments of interest management are so in their balance sheet-neutral effect and on the other hand the separation of liquidity and interest rate risks.

Thus, a separate control is possible. Interest rate risks can be demarcated and secured without moving liquidity. The modern instruments of interest management allow the financial manager to control the success of the company through two objectives: securing income from the business activity of the company through interest rate management of the liabilities side of the balance and optimization of operational financial assets interest management on the asset side. In the context of interest rate management, the company can basically decide between interest rate hedging or the conscious acceptance of interest risks.