After considering all the facts, I personally would not take anyone's side in the situation between

Bankers Trust and P&G. Both make mistakes and neither is right in this situation. We can go
through some points to understand more about this case.
Regarding the derivative securities contract conducted between Bankers Trust and P&G, it is
conducted in the spirit of mutual benefit. The bet on the floating exchange rate will decrease
soon compared to the fixed exchange rate as when conducting derivative contracts, P&G
acknowledges the risk that it will take. Floating interest rates can completely increase instead of
decrease as initially predicted by businesses. However, it is not a matter of whether the floating
rate will rise or fall. P&G's loss is partly due to the way Bankers Trust works because there has
been an act of taking advantage of the position of both an advisor and a direct participant in the
representative of the derivatives contract.
As a consultant, Bankers Trust has an obligation to clearly explain to P&G the cost of canceling
the contract ahead of time. Specifically, when the US Federal Reserve (FED) raised interest rates
after the derivative contract between P&G and Bankers Trust was signed, leading to an
immediate loss of P&G in this transaction. Faced with such a result, P&G wanted to exit the
contract before the deadline (6 months), but the notice received from Bankers Trust was that if it
wanted to cancel the contract, the cost was not small, and P&G had to fully bear this cost
(increased 14% from the standard/fixed rate ~ $130 million in additional interest).
From an objective point of view, the Bankers Trust may not have properly advised P&G on the
cost of canceling this contract, and this completely violates ethical issues. Business. Bankers
Trust takes advantage of its position as both a consultant and a contract participant to abuse the
trust of its customers by not being transparent in its transactions. If they have clearly explained to
their clients all the risks and costs that may be incurred in the event of a hedge against them, then
the client will have to investigate them further. Since then, they have violated business ethics,
and the principle of honesty when serving customers.
Furthermore, if Bankers Trust employees and management were more discreet in their internal
communications and much more transparent in their conversations with customers, it would have
helped their business and reputation to be better.
Next on P&G, are they a sore loser, having agreed to the terms of the swap despite the risks?
The answer is yes. P&G is a sophisticated investor, and they are aware of the risks and returns
they can expect from trading with Bankers Trust. From my perspective, the two parties work on
a contract with clear and transparent terms and P&G has made the decision for itself to become a
customer of Bankers Trust.
After the loss occurred, it was completely difficult for P&G to accept this fact, and blamed the
Banker Trust for not clearly advising the terms when canceling the contract so early. The Banks
Trust side denies that and thinks that P&G has enough sanity to be aware of all problems.
One business ethics issue we can see here is that P&G understands the risks of this transaction
and the huge loss it can bring, but because it's a business, they risked it. After the failure, even
though they knew they were not completely right, they took the blame and sued their partner
Bankers Trust to not have to pay for the transaction. It also needs to be clarified that, when
canceling the contract, P&G still must pay the incurred fee, this is a cost that has been specified
in the contract before and P&G is responsible for complying with this provision. In fact, P&G
had to pay this fee. P&G cannot say that this fee was not known before. P&G took advantage of
the unclear situation to blame Bankers Trust for their misjudgment. If they have the right
estimate of the interest rate, it will certainly be a great deal for P&G. And one last thing, if P&G
is right, they won't have to pay the swap rate, which is close to 20% for four years.