Category

Risk Management

Pension and BenefitsRisk Management
March 25, 2021

Spring and Derisking in the Air for Defined Benefit Pension Plans

A strong stock market and higher interest rates plus regulatory relief bring smiles to some DB plan managers.An upbeat mood befitting the beginning of spring prevailed at this week’s meeting of NeuGroup for Pensions and Benefits. With the yield on the 10-year US Treasury note rebounding to pre-Covid levels and equities trading in the vicinity of all-time highs, a summer of full funding is within sight for many plans. Below are takeaways distilled by NeuGroup executive advisor Roger Heine, who helped…
Justin Jones
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Cash & Working CapitalRisk ManagementTalking Shop
March 25, 2021

Talking Shop: How Do You Use Counterparty Exposure Information?

Member question: “Does your organization review counterparty exposure? If so, how do you use this information? “What exposure types do you include? Cash, bank products, derivative contracts, other?“I understand that there are some organizations that set limits to how much exposure can be outstanding per counterparty. Does anyone have this practice in place?” Peer answer 1: “I monitor this frequently and have limits tied to my overall assets. Here are some items we look at for our liquidity providers: JurisdictionRegulatory environment…
Justin Jones
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BankingFXRisk Management
March 23, 2021

A Risk Manager Leveraging Flexibility to Benefit from Volatility

FX meeting sponsor Standard Chartered: Hedge policy flexibility may decide if volatility is treasury’s friend or foe.Volatility in foreign exchange, commodity and other markets sparked by the pandemic presented risk managers with challenges to their hedging programs. And while some corporates ended up with financial pain, others turned the volatility to their advantage. At a recent meeting of NeuGroup for Foreign Exchange sponsored by Standard Chartered, a representative of the bank used the positive experience of one member to underscore…
Justin Jones
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FXRisk ManagementTechnology
March 18, 2021

Racing to Change Horses: A Risk Manager’s Quick Switch to AtlasFX

An FX risk manager changed exposure ID systems and implemented the new solution in just three months.Changing horses in midstream is never easy, but sometimes it’s the right move. One FX risk manager who did it explained to members of NeuGroup for Foreign Exchange the benefits of jumping off his existing exposure identification system and hopping onto AtlasFX—in an extremely compressed timeline of three months.   The time and effort spent making the switch under pressure paid off big-time. “We…
Justin Jones
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InsuranceRisk Management
March 9, 2021

Insurance and the Efficient Frontier: What Happens in a Soft Market?

NeuGroup members respond to Willis Towers Watson’s risk strategy of using modern portfolio theory for insurance. Willis Towers Watson recently presented to NeuGroup members an approach to modernizing how corporates buy insurance. As NeuGroup Insights explained last week, it involves modern portfolio theory and the efficient frontier. The presentation intrigued many members, including one who said WTW provided a great overview of the central idea. He wondered how treasury would effectively convey this new way of managing risk to the CFO…
Justin Jones
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InsuranceRisk Management
March 4, 2021

Solving the Insurance Problem With an Efficient Frontier for Risk

Willis Towers Watson advocates an approach that makes use of modern portfolio theory to assess the true value of insurance.For more than a year, buying and renewing insurance policies has been a severe pain point for many finance teams, all suffering through a hard market of rising premiums, higher retentions and lower capacity. And the pandemic. That makes now a good time to consider a modernized approach to insurance and risk finance strategy that takes what Willis Towers Watson (WTW) calls…
Justin Jones
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FXRisk ManagementTechnology
March 4, 2021

AtlasFX and FiREapps: How Two FX Risk Management Systems Stack Up

NeuGroup members share what they need from FX risk management solutions, what they get and what could be better.A need for automation, a user-friendly interface and consistent accuracy were among the highest priorities in selecting an FX risk management platform for members at a recent NeuGroup meeting that zeroed in on FiREapps and AtlasFX.AtlasFX ‘dream state.’ One member who recently worked with AtlasFX to adopt the platform lauded the firm’s flexibility and willingness to meet his company’s requests. “We came…
Justin Jones
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COVID-19Risk Management
February 23, 2021

Risk Managers Who Seek Gray Rhinos and Don’t Call Them Black Swans

Some enterprise risk managers call unexpected but predictable events gray rhinos and avoid the term black swan.As awful, disruptive and devastating as the Covid-19 pandemic has been, it’s not worthy of being called a black swan, according to more than one pundit. They include the man who made the term famous: Nassim Taleb, author of “The Black Swan,” whose subtitle is “The Impact of the Highly Improbable.” Unlike a black swan event—unpredictable, with massive impact— the argument goes, the pandemic,…
Justin Jones
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FunctionalRisk Management
February 23, 2021

Squeezed for Time: Internal Auditors Presenting to Audit Committees

How auditors make sure their voices are heard when their time before the AC is limited.Internal auditors often get squeezed for time when it comes time to appear before the audit committee (AC) of the board of directors. Given that reality, some members of NeuGroup’s Internal Auditors’ Peer Group (IAPG) have devised other ways to make sure their views are heard—or read—by members of the AC. Following are some takeaways on the subject discussed at a recent IAPG meeting. Short…
Justin Jones
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Capital MarketsRisk Management
February 18, 2021

Swap Rates and the C-Suite: Making the Case for Floating-Rate Debt

Low fixed interest rates may make it harder—but not impossible—to convince management to swap to floating.Interest rates may be ticking up, but their historically low level is one reason some treasury teams may face difficulty convincing senior management to swap more of their company’s debt stack to floating rates from fixed. “It’s a hard time to argue to do it given where long-term rates are,” one NeuGroup member said at a recent meeting.“When the fixed-rate environment is this attractive, it’s…
Justin Jones
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