The effect of interest rate derivative transactions on debt savings for not-for-profit health systems.
The utilization of interest rate derivative instruments in US for-profit companies has grown exponentially since the early 1980s. International Swaps and Derivatives Association, Inc. (ISDA), reported that the amount of outstanding standard swaps grew by 25 percent during the first six months of 2003. The growth rate of all interest rate derivatives, which includes single-currency interest rate swaps, cross-currency interest rate swaps, and interest rate options, grew by 24 percent during the same period. The total outstanding amount of interest rate derivatives now totals $123.9 trillion compared to $99.9 trillion at the end of 2002 (Dodd, 2003). This explosion in usage is a testament to the efficacy and flexibility of the instruments and the increased appreciation by financial managers of the importance of financial risk management in a volatile interest rate environment.
Venkataramani
Prakash
P
Rush University Medical Center, Chicago, IL, USA.
Johnson
Tricia
T
O'Neil
Patricia
P
Poindexter
Victoria
V
Rooney
Jeffrey
J
D002201:Capital Expenditures; D002202:Capital Financing / Q000379:methods* / Q000639:trends; D003198:Computer Simulation; D017046:Cost Savings / Q000639:trends; D005377:Financial Management, Hospital / Q000379:methods*; D006788:Hospitals, Voluntary / Q000191:economics*; D006801:Humans; D007449:Investments / Q000145:classification / Q000191:economics*; D017059:Models, Econometric; D009939:Organizations, Nonprofit / Q000191:economics*; D011907:Rate Setting and Review; D012308:Risk Management / Q000191:economics / Q000379:methods*; D013997:Time Factors; D014481:United States