Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 39
THE RISK OBSERVATORY
Whilst the detention of Deutsche Marks was mostly declining,
the appearance of the Euro gave a "kick-in-the-pants" push
to the European currency representation. This must be
therefore due to reasons other than just the need to have a
European financial denomination since for financial engineers, when a European currency series starting before the
inception of EUR is needed, DEM is used as the proxy anyhow.
"stored" as a foreign currency reserve, it has become the 8th
traded currency with 4% of the deals, whilst it was nowhere
to be seen 15 years ago. There are obvious reasons and
circumstances that helped over that term, but there is a clear
acceleration over the last 5 years. This suggests interesting
analytical questions like "how much trading in financial
markets influences the detention of currencies in foreign
reserves?", etc...
Having its currency being used as the major one for international transactions and reserves provides certainly advantages, if you accept the principle of a floating currency (remember the "impossible trinity"). To keep it simple, it allows
to print bills with a much more limited effect on your local
inflation as they will be used abroad as well, and it facilitates
the exporting activities of your U.S. firms as contracts can
be directly be negotiated in USD limiting the need to quantify
your transactional FX exposure and to spend in hedging
costs, with less bargaining efforts at least. Now, disrupting
events or evolutions can produce a
shift. In the past, it was often due to
FIGURE 3: CURRENCY DISTRIBUTION OF OTC FOREIGN EXCHANGE TURNOVER.
changing geopolitics and wars. Today,
NET-NET BASIS, 1 PERCENTAGE SHARES OF AVERAGE DAILY TURNOVER IN APRIL2.
1
questions arise about (1) the advent of
Figure 3:
Currency
Distribution
SETTLEMENTS,
of
OTC
Foreign
Exchange
Turnover.
Net--‐net
basis,
percentage
shares
of
BANK OF
INTERNATIONAL
TRIENNAL
CENTRAL
BANK
SURVEY
(DEC.
2016).
cryptocurrencies, (2) the evolution of
average
daily
turnover
in
April2.
Bank
of
International
Settlements,
Triennal
Central
Bank
Survey
(Dec.
2016).
technology and platforms which facili
2001
2004
2007
2010
2013
2016
tate processes and follow-up, but also
Currency
(3) national and international regulation
Share
Rank
Share
Rank
Share
Rank
Share
Rank
Share
Rank
Share Rank
used as a competition weapon. On the
USD
89.9
1
88.0
1
85.6
1
84.9
1
87.0
1
87.6
1
latter, the stricter application of U.S.
EUR
37.9
2
37.4
2
37.0
2
39.0
2
33.4
2
31.4
regulation focusing on off-shore tran2
sactions involving U.S. dollars abroad
JPY
23.5
3
20.8
3
17.2
3
19.0
3
23.0
3
21.6
3
and the taxation of non-repatriated
GBP
13.0
4
16.5
4
14.9
4
12.9
4
11.8
4
12.8
profits by U.S. firms are examples of
4
AUD
4.3
7
6.0
6
6.6
6
7.6
5
8.6
5
"frictions" that could advocate for other
6.9
5
CAD
4.5
6
4.2
7
4.3
7
5.3
7
4.6
7
adoptions. Time will tell. But some
5.1
6
CHF
6.0
5
6.0
5
6.8
5
6.3
6
5.2
6
4.8
7
trade-offs might clearly take place
CNY³
0.0
35
0.1
29
0.5
20
0.9
17
2.2
9
4.0
8
SEK
2.5
8
2.2
8
2.7
9
2.2
9
1.8
11
when the arguments will be balanced.
2.2
9
NZD³
0.6
16
1.1
13
1.9
11
1.6
10
2.0
10
Still, at this stage and witnessing the
2.1
10
MXN³
0.8
14
1.1
12
1.3
12
1.3
14
2.5
8
great inertia of the past, "long live
1.9
11
SGD³
1.1
12
0.9
14
1.2
13
1.4
12
1.4
15
1.8
12
the USD" is all we can say...unless an
HKD³
2.2
9
1.8
9
2.7
8
2.4
8
1.4
13
1.7
13
NOK³
1.5
10
1.4
10
2.1
10
1.3
13
1.4
14
important disrupting and unpredictable
1.7
14
KRW³
0.8
15
1.1
11
1.2
14
1.5
11
1.2
17
event happens.
1.7
15
TRY³
RUB³
INR³
BRL³
ZAR³
DKK³
PLN³
TWD³
THB⁴
MYR⁴
HUF³
SAR⁴
CZK⁴
ILS⁴
CLP⁴
IDR⁴
COP⁴
PHP⁴
RON⁴
PEN⁴
OTH
0.0
30
0.1
28
0.2
26
0.7
19
1.3
16
1.4
16
0.3
19
0.6
17
0.7
18
0.9
16
1.6
12
1.1
17
0.2
21
0.3
20
0.7
19
0.9
15
1.0
20
1.1
18
Hugues Pirotte,
0.5
17
0.3
21
0.4
21
0.7
21
1.1
19
1.0
19
Professor of Finance, Solvay BS, ULB
0.9
13
0.7
16
0.9
15
0.7
20
1.1
18
1.0
20
Partner, FinMetrics SA
1.2
11
0.9
15
0.8
16
0.6
22
0.8
21
0.8
21
0.5
18
0.4
19
0.8
17
0.8
18
0.7
22
0.7
22
0.3
20
0.4
18
0.4
22
0.5
23
0.5
23
0.6
23
0.2
24
0.2
22
0.2
25
0.2
26
0.3
27
0.4
24
0.1
26
0.1
30
0.1
28
0.3
25
0.4
25
0.4
25
0.0
33
0.2
23
0.3
23
0.4
24
0.4
24
0.3
26
0.1
27
0.0
32
0.1
32
0.1
34
0.1
34
0.3
27
0.2
22
0.2
24
0.2
24
0.2
27
0.4
26
0.3
28
0.1
25
0.1
26
0.2
27
0.2
31
0.2
29
0.3
29
0.2
23
0.1
25
0.1
30
0.2
29
0.3
28
0.2
30
0.0
28
0.1
27
0.1
29
0.2
30
0.2
30
0.2
31
0.0
31
0.0
33
0.1
33
0.1
32
0.1
33
0.2
32
0.0
29
0.0
31
0.1
31
0.2
28
0.1
31
0.1
33
...
37
...
40
0.0
34
0.1
33
0.1
32
0.1
34
0.0
32
0.0
35
0.0
36
0.0
36
0.1
35
0.1
35
6.6
6.6
7.7
4.7
1.6
2.1
Total
200.0
200.0
200.0
200.0
200.0
200.0
1
Adjusted
for
local
and
cross--‐border
inter--‐dealer
double--‐counting
(ie
"net--‐net"
basis).
2
Because
two
currencies
are
involved
in
each
transaction,
the
sum
of
the
percentage
shares
of
individual
currencies
totals
200%
instead
of
100%.
3
Turnover
for
years
prior
to
2013
may
be
underestimated
owing
to
1
- Adjusted for local and cross-border inter-dealer double-counting (ie "net-net" basis).
incomplete
reporting
of
offshore
trading
in
previous
surveys.
Methodological
changes
in
the
2013
2 - Because two currencies are involved in each transaction, the sum of the percentage shares of individual
currencies totals 200% instead of 100%.
survey
ensured
more
complete
coverage
of
activity
in
emerging
market
and
other
currencies.
4
3 - Turnover for years prior to 2013 may be underestimated owing to incomplete reporting of offshore trading in previous surveys.
Turnover
may
be
underestimated
owing
to
incomplete
reporting
of
offshore
trading.
Methodological changes in the 2013 survey ensured more complete coverage of activity in emerging market and other currencies.
4 - Turnover may be underestimated owing to incomplete reporting of offshore trading.
LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE
MAGAZINE -
N°99 - NOV // DEC
DEC // JAN
JAN 2018
2018
-
Next, it is interesting to compare these numbers, which refer
to reservoirs of foreign currencies at central banks, to the
dynamic use of currencies in financial markets. For that, we
have to take a look at what the Bank of International Settlements (BIS) in Basle has to say. Its latest triennial central
bank survey of December 2016 is summarized in Figure 3. We
can find out for example that the Swiss franc, which represents 0.17% of foreign currency reserves, is present in 4-6%
of all currency pairs traded. Thus, you might have a different
picture depending on what you compare the currencies for.
What is also striking is that, even though the Renminbi is not
39
Table des matières de la publication Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018
COUVERTURE
SOMMAIRE
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW with Dick Oskam, Head of Sales for Transaction at ING
FOCUS
Value generation - How to create (more) value for the company with a better capital allocation
Managing bank accounts, the Cinderella of treasury management
Treasury on the Digital Front Line
FORUM
Implementation of EU Tax Rules
Innovative payments solution
Construction de portefeuille : combiner gestion active et passive
Decision Time: Investing in Money Funds after EU Reforms
Payments as a Strategy
Are asia’s corporates ready to repo?
The evolving role of treasurers
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - COUVERTURE
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 2
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - SOMMAIRE
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 4
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - EDITORIAL
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - FINANCIAL HIGHLIGHTS Luxembourg Tax News
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 7
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - INTERVIEW with Dick Oskam, Head of Sales for Transaction at ING
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 9
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Value generation - How to create (more) value for the company with a better capital allocation
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 11
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 12
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 13
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Managing bank accounts, the Cinderella of treasury management
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 15
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 16
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 17
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 18
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Treasury on the Digital Front Line
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 20
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 21
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Implementation of EU Tax Rules
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 23
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Innovative payments solution
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 25
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Construction de portefeuille : combiner gestion active et passive
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 27
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Decision Time: Investing in Money Funds after EU Reforms
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 29
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Payments as a Strategy
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 31
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Are asia’s corporates ready to repo?
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 33
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - The evolving role of treasurers
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 35
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 36
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - THE FINANCIAL RISK OBSERVATORY
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 38
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 39
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 40
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - NEWS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 42
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 43
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 44
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 45
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 46
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 47
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 48
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 49
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 50
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 51
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 52
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 54
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 55
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 56
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