INTEREST SWAP IN CORPORATE GOVERNANCE
Abstract
The development of financial markets necessitates the use of swap contracts, considering the relevance of cooperation between domestic corporations and foreign partners in the post-war economic recovery of Ukraine. The aim of the article is to provide a critical review and justification of the use of swap contracts and to develop methodological approaches for determining the economic feasibility of their use in domestic financial management practices. The article proves that hedging risks with swaps is an effective mechanism, which, unfortunately, is not widely used in the corporate sector of Ukraine, unlike foreign corporate practices. The shortcomings of the existing mechanism for conducting swap contract auctions in Ukraine, which has negatively affected the development of this segment of the financial market and the use of its instruments, are substantiated. An author-developed methodology for determining the economic feasibility of projects has been created, which involves deriving an aggregated NPV indicator for all market change scenarios, taking into account the probability of each scenario occurring. The research delves into the methodologies for assessing the economic viability of swaps in corporate financial management, emphasizing their potential in risk hedging. Despite their effectiveness, the usage of swaps in Ukraine's corporate sector remains limited compared to global practices, partly due to deficiencies in the auction mechanism for swap contracts. This limitation hampers the growth of this financial market segment and the broader adoption of financial instruments. The article covers essential topics such as corporate governance, risk management strategies, and the impact of interest rate swaps on corporate financial health. It critically analyzes the current legislative framework and proposes amendments to resolve discrepancies in the Tax Code, advocating for a more conducive environment for the use of derivative instruments in corporate risk management. This comprehensive study aims to enhance understanding and encourage the strategic use of interest rate swaps in Ukraine, aligning with global financial practices for improved corporate governance and financial stability.
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