A practical framework for converting protection into outcomes
Institutional hedging failures are rarely technical.
Across FX, rates, credit, and equity portfolios, hedges often perform exactly as designed. Gains accumulate. Risk metrics improve. Accounting treatment holds.
Then the gains disappear.
Protection is observed, reported, and quietly given back — through carry, decay, liquidity stress, or governance delay.
The failure is not instrument choice.
It is the absence of a monetisation doctrine.
Without defined triggers, delegated authority, re-hedging logic, and integration with liquidity management, derivative hedges remain accounting artefacts rather than risk outcomes.
This framework examines how monetisation failures emerge across asset classes, why governance structures reinforce inaction, and what changes when protection is treated as a decision rather than a mark-to-market.
Read the practitioner paper
Monetising Derivative Hedges – A Practical Framework