Foreign Exchange Risk Management: Evidence from Finland

Abstract

This study investigates foreign exchange risk management in major Finnish firms. The shift to a floating foreign‐exchange regime has increased risk aversion and intensified risk management in a number of firms. The managers feel they can forecast foreign exchange development, and that they have been successful in risk management. Managers pay attention to economic exposure, and instead of being closed out, the foreign exchange exposures are managed actively. The transaction risk of both agreed‐upon flows and budgeted items are hedged. Accounting exposures are also managed extensively.

Citation

Hakkarainen, A., Kasanen, E. and Puttonen, V. (1997), "Foreign Exchange Risk Management: Evidence from Finland", Managerial Finance, Vol. 23 No. 7, pp. 25-44. https://doi.org/10.1108/eb018633