ABSTRACT
An innovation in finance, as well as investment in the research and development (R&D) in different financial instruments, is a fundament of financial knowledge management. A wide literature has shown that there is a high positive correlation between financial markets (instruments), knowledge (information) and company performance (good investment choices). This chapter analyzes the importance of knowledge management in making financial decisions (the choice of financial instruments) in order to reduce risks in international conditions. According to BIS bank (Bank for International Settlements) data (2018), the most developed financial derivatives markets are analyzed. The novelty of this chapter lies in the fact that companies operate in conditions of international financial risks and that innovations and best practices in this issue provide solutions for such risk reduction. The conclusion is that financial innovations based on the best practice aimed at risk protection contribute to the stability of financial flows. Such instruments represent a cost to companies but also reduce risks.
