The market volatility of 2008 and 2010 has caused many funds to reach for new concepts such as "Risk Parity," "Risk-Based Allocations," "Tail Risk Hedges
," and "Pension De-Risking," with managers glad to supply such products.
The most likely market suppliers of Asian Crisis risk hedges
are the big insurance companies, like AIG, that have historically dealt in emerging market political risk insurance.
The collateral posting triggers for currency hedges are more stringent than those for interest rate and basis risk hedges
. Standard & Poor's believes that the market for interest rate and basis risk hedges
enjoys less price volatility and has more liquidity, thus allowing for a lower-rated counterparty without increasing the overall risk to the transactions.
The BOJ also conducted a derivative transaction survey, which indicated the average daily dealing volume in Tokyo plunged 48.5% from the previous survey to $21.7 billion, reflecting slowing demand for interest rate risk hedges
amid the ultra-easy monetary stance.