15.1 Introduction

A scarcity of sources of funding for new vessels has resulted from the introduction of the Basel III Rules, which have further reinforced the risk-aversion of European banks, whether as individual players or as contributors to syndicated loans. Consequently, shipowners have been constrained to raise a higher proportion of the required funding themselves, either in the capital markets or through active management of their own commercial risks. Shipping derivatives were designed by financiers as a tool of risk management, whose function was precisely to hedge some of the risks suffered by shipowners.