Foreign exchange risk
- (exchange rate risk)Risk that the market value of the bank, measured in the base currency, is exposed to fluctuations in foreign exchange rates. This risk is quantified by the open currency position. The related standard reports are:• Open currency position.• Forex risk analysis on FCY interest.The open currency position report gives information about the open currency position (OCP) per currency, OCP per currency group and the total OCP. The open currency position is the measure of foreign exchange risk. It is the difference between all assets and liabilities plus forex (conditional and unconditional) purchases and sales in a foreign currency. The forex risk analysis on foreign currency interest report gives information about the risk that the FCY interest is exposed to fluctuations in foreign exchange rates. See also Position, position administration tables, Standard position codes, combined position code, Risk management, Forex, Open currency position, Mismatch, Interest risk, Liquidity risk, forward revaluation, interest revaluation, break even and Nostro projection.
International financial encyclopaedia . 2014.
Look at other dictionaries:
foreign exchange risk — One of nine risks defined by the OCC. The risk to earnings or capital arising from adverse movement of foreign exchange rates. The Federal Reserve includes this risk in its definition of market risk. American Banker Glossary The risk that a long… … Financial and business terms
Foreign-Exchange Risk — 1. The risk of an investment s value changing due to changes in currency exchange rates. 2. The risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movement in exchange rates.… … Investment dictionary
Foreign exchange risk — The risk that a long or short position in a foreign currency might have to be closed out at a loss due to an adverse movement in the currency rates. The New York Times Financial Glossary … Financial and business terms
Foreign exchange risk analysis on foreign currency interest report — A standard position report which analyses the foreign exchange risk on interest by comparing defined risks with costs and expenses. It gives a total cumulative mismatch for the foreign exchange risk as well as a mismatch for each individual… … International financial encyclopaedia
Foreign exchange market — Forex redirects here. For the football club, see FC Forex Braşov. Foreign exchange Exchange rates Currency band Exchange rate Exchange rate regime Exchange rate flexibility Dollarization Fixed exchange rate Floating exchange rate Linked exchange… … Wikipedia
Foreign exchange hedge — A way for companies to eliminate foreign exchange (FOREX) risk when dealing in foreign currencies. This can be done using either the cash flow or the fair value method. The accounting rules for this are addressed by both the International… … Wikipedia
Exchange risk — The variability of a firm s value that results from unexpected exchange rate changes or the extent to which the present value of a firm is expected to change as a result of a given currency s appreciation or depreciation. The New York Times… … Financial and business terms
exchange risk — The variability of a firm s value that results from unexpected exchange rate changes, or the extent to which the present value of a firm is expected to change as a result of a given currency s appreciation or depreciation. Bloomberg Financial… … Financial and business terms
Foreign-exchange option — Foreign exchange Exchange rates Currency band Exchange rate Exchange rate regime Exchange rate flexibility Dollarization Fixed exchange rate Floating exchange rate Linked exchange rate Managed float regime Markets Foreign exchange market Futures… … Wikipedia
Foreign exchange option — In finance, a foreign exchange option (commonly shortened to just FX option or currency option) is a derivative financial instrument where the owner has the right but not the obligation to exchange money denominated in one currency into another… … Wikipedia