Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016 - (Page 46)

CAN EFFICIENTLY MANAGE ENTERPRISEWIDE FX RISK AS THEY GROW As mid-market companies start seeking revenues outside their domestic markets, they are increasingly exposed to FX risk. Treasurers are challenged to set up a risk framework and find tools to help them control currency volatility. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°94 - JUL / AUG / SEP 2016 CORPORATE FINANCE 46 In a recent Reval survey, 37% of about 150 finance professionals working in companies with less than USD 1 billion in revenue said their treasury teams will become more international over the next three years. As mid-market companies start operating in foreign markets, they will become increasingly exposed to FX volatility. This is particularly challenging in emerging markets, where currency pairs tend to swing even higher. As the turmoil in FX markets continues, corporate treasuries in the world´s largest companies review their risk guidelines and adapt their hedge accounting programs. However, the treasuries of most mid-market companies don´t even have a risk framework. The financial professionals of these companies are tasked to define risk strategies and guidelines from scratch. Risk Framework: Sync and Standardize For treasurers in mid-market companies, building a risk framework is a stretch because their organizations often cannot dedicate a full-time person as risk manager. But as many risk-related activities fall within treasury's core mandate, treasurers are best suited to drive professionalism in exposure management. Typically, finance experts already manage risks such as liquidity and capital risk, foreign exchange and interest rate exposure, compliance risk, operational risk, cyber risk and counterparty risk on a regular basis. Depending on the company, treasury's responsibilities can also expand into less traditional risk areas, such as commodity risk. As FX risk management in particular becomes more important in growing companies, it becomes necessary to implement structures and define guidelines for an enterprise risk framework. Typically, a solid control framework covers the following areas: * Risk factors: Which risk factors have to be considered by each business unit, and on an enterprise level? * Risk processes: How should risk be valuated and hedged? * Risk reporting: How and how often should exposures be analyzed and reported?

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW Philippe Gelis - Kantox - Fintech and the future of banks
FOCUS
Lost in transformation
Everything has a price – a transfer price
Treasury Survey - an unprecedented picture of treasury activities in Luxembourg
FORUM
The impact of negative rates on Treasury and Risks Management Systems
Towards reporting harmonisation?
Understanding the Treasury impact of BEPS
Impacts of Single Resolution Mechanism and Bail-in for European Banks
Supply chain? Not concerned?
Collateral management and the Corporate Treasury function.
Efficiently Managing Cross-Border Payments in Turbulent Times
CORPORATE FINANCE
How Mid-Market Companies Can Efficiently Manage Enterprise-wide FX Risk as they Grow
Investing surplus cash in repos
A wind of technology changes in the treasury management world
Invoicing can be fun….?
Comment améliorer la performance des fonds de pension européens
15 MINUTES WITH O2Finance
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°94 - Juil/Août/Sept 2016