The questionnaires next identified some areas of possible concerns by management when using derivatives and asked firms to rate their degree of concern with each issue. Figure 3 summarizes the results.
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Many US firms report “high” or “moderate” concerned with all twelve issues raised whereas German firms express little concern with almost all of the issues. These results give rise to several questions: Why are US firms more anxious when using derivatives? Are German companies ignorant of the risks implied in the list of concerns or are they more confident in mastering those risks? The perception by the public is the only issue where slightly more than 20% of the German companies are highly concerned with another 15% indicating moderate concern. This is one of the major issues with the US firms but not the most important one.

US companies express their highest concerns with the evaluation of risks of derivatives, especially with credit risk (even though only one reported an actual loss on a derivative transaction), and with liquidity risk. These are not major issues with German firms. This difference can be explained by their more conservative approach to those issues to be outlined in section VII below. Other areas of major concern for US companies are quantifying exposures, pricing and valuation, and monitoring and evaluating derivatives. These risk management issues cause some moderate concerns at German companies but again on a much smaller scale.
Another group of important issues for US firms are the accounting treatment, the disclosure requirements, and tax and legal issues regarding derivatives. Those concerns reflect the very lively discussion currently underway on these topics in the US. Because of the discussion in the previous section one might have expected German companies to be highly concerned with the accounting treatment and with the taxation of derivatives. However, only a few German companies report to be only moderately concerned with those issues.