1 min readTransparency is the new buzz for corporate treasury professionals in their constant pursuit to understand and track underlying risk. Like the shifting channels of the Mississippi River, credit exposures in investments and counterparties present continuously variable hazards to navigation. The credit crisis intensified treasurers’ efforts to understand their exposures, but too often formal reports were…
2 min readIn October, short treasuries were whipsawed by political dysfunction with the threat of an “operational interruption” to Treasury bills that caused yields to soar above 50 basis points for October 17 maturities. This volatility followed on the heels of a Treasury rally in September which was induced by the Fed’s failure to announce a tapering…
2 min readRisk management is core to every treasury operation whether the organization is a biotech in phase III trials or a global Fortune 500 company. Large or small, an organization’s goals should be centered on selecting and monitoring exposures that are appropriate for its risk tolerances. Granted, staying consistently true to those tolerances is significantly more…
2 min readThis summer, the FOMC’s speeches and official statements have been focused on tapering the pace of the Federal Reserve’s asset purchases. Both the equity and fixed income markets have been hanging on to the Fed’s every word and the markets’ interpretation of the FOMC’s comments have led to a significant sell-off in longer-term yields, while…
1 min readEach 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 SEC voted unanimously to propose…
1 min readSurvey goal To shed light on treasury departments’ efforts to mitigate liquidity risk in short-term cash investment, debt and forecasting practices. Summary of 2013 Survey Treasurer’s Mindset: “Surpising Complacency with Bank Exposures” Context: FDIC insurance dropped from Unlimited t0 $250,000 Dodd-Frank Bank deterioration continues Select Highlights: Debt: Continued increase in staggering facilitites Fewer loan covenants…
2 min readCounterparty risk associated with financial institutions seems to be the hot topic lately. From San Francisco to Miami, treasury conference attendees were discussing the issue and the conferences devoted working sessions to the topic. We believe that this is not a passing fad; rather, counterparty risk in one’s enterprise needs to be addressed and managed…
1 min readIdentifying 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 BBB, How the Megatrend May…
1 min readThis month I attended a client’s audit committee meeting to review cash investment strategies and an interesting question was raised; the treasurer asked if it was time to start evolving their risk tolerance away from a Government-only strategy. This was a provocative question and one that we hear frequently these days. Although this particular company…
1 min readOver the last decade, the “too big to fail” or systemically important status of banks, combined with the FDIC’s Transaction Account Guarantee (TAG) program, has allowed many of the country’s largest banks to grow even larger. Treasury professionals who may have been reassured by a bank’s brand and size also may have increased counterparty exposures…