If you read the job description of just about any treasurer or CFO it will centre on being a strategic designer of matters financial hedging, funding and interest cost reduction. In the days prior to the broad-based application of derivatives, pursuit of any one of the above would bring about typically uncontrollable consequences in the other two.
For instance, if a company's main source of financing was floating rate bilateral loans from banks, it was exposed to the consequent effects of an upward move in short-term interest rates. If it did not want that risk, it would have to physically go about an alternative form of financing based on a fixed rate of interest....
