CIRM Clients Avoid Over-Insuring
Hedging almost always turns out to be too expensive. Essentially, it is a meat axe — and the longer-term the hedge, the blunter it is. (See the cost of hedge-based rate protection in the maroon line bel0w.)
A Risk Management Plan produces better rate protection far more affordably by using a scalpel to carve out exactly what is needed throughout the loan's term. (See the cost of LIBOR-based rate management in the green line below.)
