Additionally, this positive association holds for interest-rate options contracts, forward contracts, and futures contracts, suggesting that banks using any form of these contracts, on average, experience significantly higher growth in their C&I loan portfolios. Furthermore, C&I loan growth is positively related to capital ratio and negatively related to C&I loan charge-offs. The findings in this study are confirmed after a robustness check. Examining the relationship between the C&I loan growth and derivative usage poses a potential endogeneity problem because the derivative-use decision and lending choices may be made simultaneously. To address this problem, an instrumental-variable approach is.
