Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Snowshoe who wrote (54625)	10/22/2004 4:55:46 AM
From: EL KABONG!!!	Read Replies (1) of 74559

Hi Snowshoe, do you have any idea why the BPT trust was set up in the first place? Would this have been because BP needed the capital? Or needed to spread it's risk? Or wanted a mechanism for compensating it's employees? Almost always, the answer is to alleviate risk. Acquiring additional capital and/or maximizing profits are secondary considerations. Most companies are quite risk averse, and are therefore very willing to share any potential proceeds in exchange for lessening their exposure to any potential risks over time, and "over time" is the key phrase to remember. Various trusts are merely the legal vehicles used to effectively transfer risk. VI

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