1 Until now it has not impacted our treasury operations because we do not do financial reporting in IAS. We do our financial reporting in Brazilian GAAP and USGAAP.
2 We think the use of credit-linked notes protecting against country risk is a quite widespread practice in the corporate market. On the other hand, the use of credit derivatives to protect against corporate risk is not used very frequently. Because the corporate credit risk that companies like ours face is not usually very homogeneous the market has not been able to develop much liquidity in these products. Within our group we might use credit protection in the form of an insurance policy that covers a portfolio of clients. But this portfolio probably wouldn’t find a liquid market that would allow the development of credit derivatives.
The second part of the question is more complex but based on analysis of the type of credit risk that is limiting companies’ operations, the credit derivatives market could be developed.
3 The banks that are focusing on FX trading are normally very efficient in providing quotes. Until now, technology has not impacted the more important operations. We still execute them using the telephone which actually is a quite efficient way of operating. On the other hand, for operations with smaller amounts we do use an automatic system.
