The main aim of this chapter is to demonstrate how the implementation of an intra-branch exchange risk hedging strategy can be traced cross-sectionally, that is, by means of snapshots of banking practice at certain points in time. After documenting the Yokohama Specie Bank (YSB)’s early history, it is demonstrated how the bank went through different managerial phases. YSB development in China on a silver basis is explained as a natural consequence of hedging practice, in contrast to the tendency to treat the latter as an anomaly. At all times, the bank could not neglect the realities of the world’s monetary geography. Willingly or not, YSB’s cadre had to take into account the fact that the bank’s center of gravity would, almost inevitably, move towards Shanghai; YSB’s decentralized operating in the many industrial and commercial centers of Manchuria was the consequence of government policy, on the one hand, and the severely limited credit conditions within the regions, on the other.
Inflation Risk Hedging Strategy for Equities using Commodity Futures