Financial derivatives and their impacts on balance sheet of banks

Recently occured fluctuations in financial markets brought the banks togive weight to their risk management policies. From the beginning of August2007 the international financial crisis within one year reached the number ofbankrupted banks to 13 in the US. In 2008 banks bankruptcy has continued toaccelerate. With bankrupted investment bank Lehman Brothers in 2008 only 11banks were in the situation. Despite these figures, the total officially except forLehman Brothers, 12 banks had total losses between 600 and 700 billion dollars.According to estimates done by the US Federal Deposits Insurance Corporation(FDIC), excluding Lehman Brothers bank the total assets of the wrecked banksare at the level of 174 billion dollar.We observe every day?s renewals after winning the importance offinancial derivative instruments. Exactly these products accounting standardswe can see in this renewal. Besides, in according to the usage purpose ofaccounting and financial derivative instruments its complex structure becomesevidently indicated.Especially after the crisis of the banks, the financial derivativeinstruments usage has become a very important tool. Therefore, the effects ofthese products to the balance sheet have become an important issue as well.These instruments have been reflected as for the hedging purpose both negativeand positive effects with the purpose of risks protection. Especially in order toprotect used in the banks products from interest rate and exchange rate risks,future rates and exchange rates changing were reflected in financial reportswith negative and positive results.In this study we have gained more important facts related to the crisis,financial derivative instruments which give an overview of these instrumentsdescribing the accounting and balance sheets? impact.