Sovereign remedy

The World Bank, the lender of last - and often first - resort for the poorer nations of the world, uses derivatives to hedge its own risk book much as any other bank would. But it has another important role in the risk business: acting as an intermediary between the derivatives markets and borrowers too inexperienced or too low down the credit spectrum to reach them directly.

Gloria Grandolini has spent her entire career at the supranational. Now, as senior manager of the World Bank treasury's banking and debt management group, she has two responsibilities: providing the tools for risk management to the bank's customers and advising on their use.

Seventy-eight middle-income nations are eligible for loans from the International Bank for Reconstruction and Development (IBRD), one of the World Bank's two lending arms. (The other, the International Development Association