NIB Nordic Investment Bank

Market risk

Market risk

Market risk is i.a. the risk that losses incur as a result of fluctuations in exchange rates and interest rates. NIB's exposure to exchange rate risk occurs when translating assets and liabilities denominated in foreign currencies into the functional currency, the euro. The Bank funds its operations by borrowing in the international capital markets and provides loans often in currencies other than those borrowed, which unhedged would create currency mismatches in assets and liabilities. Furthermore, the funds borrowed often have other interest rate structures than those applied in the loans provided to the Bank's customers.

Exposure to exchange rate risk and interest rate risk created in the normal course of business is minimised by the use of derivative instruments. The residual risk must be within strictly defined limits. Market risks are measured, managed and reported in accordance with a set of limits and procedures that are reviewed on a regular basis.

Risk Management Policies (403 KB)
  • AR2016


NIB signs loan agreement with Husqvarna for R&D investments

A seven-year maturity loan agreement to finance Husqvarna AB's R&D investments 2017–2019.

5 Jan 2018

NIB opens 2018 Kauri market with NZD 400m transaction

The Bank's five-year NZD 400 million transaction has become inaugural in the New Zealand bond market this year.

5 Jan 2018

NIB finances Ericsson’s 5G research programme

A loan to the Swedish telecom company Ericsson will finance a research programme for the development of 5G mobile technology.

22 Dec 2017