Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

Interest Rate Exposure 
Most such studies on interest rate exposure have focused on the exposure of financial institutions (Schrand, 
1997; Anwer et al., 1997). Anwer et al. (1997) provide evidence on the interest rate risk management activities of 
commercial banks. Their findings show derivative users to have lower exposure than non-users and that the majority 
of banks use derivatives to reduce exposure. Interest rate exposure has also been examined in a non-financial 
international setting. In a sample of 490 German firms, Bartram (2002) documents significant firm exposure to 
interest rates. He finds evidence of a significant negative relation between exposure and measures of firm liquidity 
but finds no evidence of an empirically significant relation between financial leverage and interest rate exposure.