PT  - JOURNAL ARTICLE
AU  - Yung-Ming Shiu
AU  - Peter Moles
TI  - What Motivates Banks to Use Derivatives: <em>Evidence from Taiwan</em>
AID  - 10.3905/jod.2010.17.4.067
DP  - 2010 May 31
TA  - The Journal of Derivatives
PG  - 67--78
VI  - 17
IP  - 4
4099  - https://pm-research.com/content/17/4/67.short
4100  - https://pm-research.com/content/17/4/67.full
AB  - The two major types of derivatives used by banks are contracts tied to interest rates and to exchange rates. What factors determine whether, and how extensively, a bank will use these derivatives? These questions have been well investigated for U.S. and European banks and financial institutions; this article reports on a broad survey of derivatives usage by banks in Taiwan. The results for a wide variety of explanatory factors are largely as found elsewhere, such as the fact that larger banks are more likely to use derivatives, especially if they have large exposures to foreign exchange rate or interest rate risks. Examination of other factors, such as measures of concentration in revenues or costs, uncovers no major surprises but a few tantalizing results that bear further investigation.TOPICS: Interest-rate and currency swaps, global