While complete information about all aspects of MGRM's energy and hedging strategies is not yet available, some key implications can already be drawn from the MG experience. First, conflicting and inappropriate accounting and disclosure conventions can undermine a firm's hedging strategy by causing confusion among its creditors and investors about what the firm is doing and about its financial position. Confusion of just this kind undermined public confidence in MG, likely weakening its ability to cope with MGRM's problem
Second, short-term funding requirements such as MG experienced, if not anticipated and properly managed, can undermine an otherwise sound hedging strategy. Finally, lack of understanding at board level about how a firm is using derivatives can ultimarely undermine a firm's hedging strategy.