There is a weapons race among the financial elite. The weapons in question are brains, computers,communications and sophisticated software. Preparation for the battlefield starts with the hiring of top-tier traders, ingenious financial analysts and the best 'rocket scientists' that can be found. Within each army there is a division between people who do things and people who get the credit. The officers who set limits on exposure to interest rate risk, currency risk, country risk and other market risks belong to the former group, where there is less competition but also more by way of control. In an age of financial engineering, a sound preparation for the financial industry includes a system of limits supported by the most flexible, knowledge-enriched technology platforms and their ingenious usage. Excellence in the new products and services means: mastering the global financial markets; developing the best-performing products; dealing with AAA clients; having first-class internal controls; and managing risk efficiently. The really important clients of any financial institution are those that are most advanced in their own financial weaponry, that know how to control risks while capitalising on deregulated environments around the world. A crucial question for every bank to ask itself is whether it is ready to trade with such clients. Being a player in markets that are more competitive than ever involves very serious challenges, which have to be met in a focused manner. At the top of the list are the market risks that this book addresses. This book has been written for executives in the financial industry:bankers, investment advisors, loans officers, traders, financial analysts and rocket scientists. It is also structured to appeal to treasurers of major companies who operate as non-banks and to individuals of high net worth. The subjects covered are of interest to members of boards of directors and management boards, and their immediate assistants, who are concerned about risk and return, and wish to implement programmes which can enable them to grasp business opportunities while minimising exposure and failure. The focus of the book is on setting limits within a comprehensive system of internal controls, including the management policies that are required to make the setting of limits effective. Accordingly, the book examines the challenges of developing and selling new financial instruments, explaining why business success is increasingly dependent on gaining the upper ground in new financial services without assuming an inordinate amount of exposure.