Media – Whitepapers
January 1, 2014
As 2013 closes and we pen our annual “Three Challenges in the Coming Year” research paper, I thought that a self-evaluation of our previous year’s views would make for an interesting exercise. Last year at this time, we cited acceleration in money fund reform, scarcity of eligible investments and the
Read more
December 2, 2013
Abstract In this research commentary, we offer a behind the scenes look at the credit approval process for cash investment portfolios. We discuss nine essential components to help clarify a process that can sometimes seem mysterious and intimidating. Beyond Ratings – What Makes Cash Unique The Credit Universe – It’s
Read more
November 1, 2013
Abstract The Federal Reserve introduced the new reverse repo facility to control the level and volatility of short-term interest rates, to help relieve repo collateral shortage and to better regulate the tri-party repo market. The likely impact includes the avoidance of negative yield, the addition of a high quality counterparty
Read more
October 1, 2013
Abstract We introduce a capture-analyze-manage framework to counterparty risk management. The constant risk aversion principle and a credit risk scoring system may help organizations establish a target risk level and proactively manage their positions as conditions change. Introduction Although it’s been five years since the Lehman Brothers’ bankruptcy, many corporate
Read more
July 1, 2013
Each January our newsletter focuses on the likely challenges that cash investors will face in the coming year. Given how much has transpired in the treasurer’s world since the beginning of 2013, we thought that an update on the issues facing cash investors would be helpful. On June 5th the
Read more
June 3, 2013
Abstract Experience has taught us that even seemingly strong counterparties can fail without warning. Counterparty risk management has become more challenging in recent decades due to concentrated exposures, complex financial instruments and deteriorating bank credit. Corporations should manage risk proactively, have an integrated risk policy across business lines, diversify risk
Read more
May 1, 2013
Identifying credit trends and translating these trends into risk management practices, whether in the management of a buy list or in the management of counterparty risk, is a key function within treasury departments. The negative trends in bank ratings we discussed more than a year ago, “Bank Ratings Headed for
Read more
April 1, 2013
Abstract In this paper, we discuss the concept and benefits of constant risk aversion in cash portfolio construction. The process may help treasurers understand, gauge and rationalize investment decisions to achieve consistent risk characteristics and to avoid the whiplash that can result from drastic pendulum swings between high-risk and no-risk.
Read more
March 1, 2013
Abstract Global banking authorities’ moves to resolve systemically important financial institutions (SIFIs) may result in first losses being borne by bank creditors in the event of a failure. Under the new resolution authority, size no longer may be an indication of safety for bank credit. Instead, one should look to
Read more
January 2, 2013
Abstract We have identified the acceleration of money market fund reform, the scarcity of eligible investments and the threat of negative yield as three challenges facing corporate treasury professionals in 2013. Our recommendation remains the same as found in previous research – consider a separately managed account as a defensive
Read more