Despite the wave of derivative debacles in the past year, few corporations have actually reduced their use of the financial instruments, a study by Emcor Risk Management Consulting concludes.

Only 10% of the companies surveyed by Emcor, of Irvington, N.Y., reduced the volume of their derivatives transactions or increased the use of plain- vanilla derivatives instead of complex ones.

And only 18% of the respondents said they had adjusted their current risk management policies.

Derivatives are financial instruments whose value is tied to the performance of other benchmarks, like currencies, interest rates, and stock indexes.

Their use has attracted intense criticism as a laundry list of major U.S. corporations have reported hundreds of millions of dollars in derivatives losses.

As a result, more than half the respondents to the Emcor survey report derivatives reviews under way at their companies.

"When you examine recent derivatives losses, the one common thread among all the cases is the lack of adequate management reporting and controls," said Robert J. Baldoni, managing director of Emcor.

"While our survey found no significant change in derivatives utilization, it is reassuring that corporations are taking steps to heighten management scrutiny and strengthen internal controls and reporting," he added.

But the Emcor survey, which is based on over 100 responses, found while there is concern, there has been little action.

And while most of the negative critiques have been leveled at dealers, most specifically Bankers Trust New York Corp., most of the Emcor respondents said responsibility lies with the end-users.

For example, responsibility for making certain that derivatives deals adhere to corporate or institutional risk management policies belongs to the user, according to 71% of the respondents.

More than 40% of the respondents said the end user is responsible for devising an exit strategy from the derivative transaction, while only 4% said this was the dealer's responsibility.

However, 40% of the respondents said it was the responsibility of both parties.

The answers were mixed on the need for more legislative oversight, as has been proposed by a number of congressmen. Still, only 23% of respondents said there should be no more regulation.

When asked whether additional legislation or regulations are needed to police derivatives in the marketplace, 46% called for a standardized method of measuring risk.

More than 30% wanted increased disclosure by end users, and more than one-third supported regulation and supervision of all dealers.

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