Increasing the treasury role in risk (Case study)

Treasurers can add significant value to the overall strategic risk management of a company and this treasury has been using its skill set to broaden the scope of their responsibilities in the risk space. This case study will walk you through the challenges, the opportunities and how treasury can play a more important role in protecting the business.

Constantinos Tsolakas: Head of Group Treasury Risk Management, ABB, Switzerland

Lunch

Sponsored by Lloyds Bank Corporate Markets

Richard Dallas: Transactional Banking Director, Lloyds Bank Corporate Markets

Be the best because you can (Case study)

Without question, FX risk hedging protects the business when it can’t react to a changing environment; it also reduces P&L volatility and the uncertainty of cash flow. But best practice is difficult to define for FX hedging as companies have so much variation in terms of exposures, requirements and focus. This company has clearly gone a long way towards determining what best practice can be from determining a strategic currency risk management policy through to putting into place a detailed operation which is a centre of excellence.

Omar Paz: Head of Global Foreign Exchange, eBay, Inc., USA

Another take: Using pooling to curb your FX risk (Case study)

This company had a light bulb moment with its foreign exchange risk management. It doesn’t take directional currency positions and aims to be 100% covered. So why not use its notional pool for hedging its multi-currency risk? It is, after all, the ultimate natural hedge – go long in a currency in your pool where you have the exact opposite liability out in the real world. It can change your foreign exchange habits; trim right down on your use of forwards and massively cut FX transactions costs and help with any centralisation programme. Of course, there are the standard benefits too: reducing interest costs, maximising yields and eliminating intercompany loans and cross border transfers with all the nasty tax impacts. But what about all the tax hassles? They still remain pretty epic, but the company’s footprint and its intensive homework helped put it in good stead. In two years’ time, the notional pool will be the main tool for liquidity and FX management.

Kris Filipkowski: Director of International Treasury, Henry Schein, USA

Refreshment break

Best special effects: The hidden and not so hidden risks to tackle in treasury (Case study)

The incomprehensible, but obvious fluctuations hitting currencies, coupled with an environment of rising interest rates means treasury has its hands full with financial risk management. But this company is working hard on a new level of risk vigilance. From Monte Carlo simulations that measure the impact of counterparty failures and guide corporate policy on which markets to penetrate further, to IT risk (with few IT people, how fast could you change your bank if you needed to with all the resulting format issues etc) and to creating a balance scorecard on all its financial vendors which measures their error rates, this company is planning for the worst. The session will cover credit and country risk, working capital risk and IT risks.

Lars Thulstrup Bruhn: Vice President Corporate Finance, Group Treasury, Lego, Denmark

Lights, camera, action: On the right track (Case study)

This group includes over 30 companies. Managing financial risk in a complex group is no small journey. From how interest rate risk is managed to the advisory services and tailoring of hedging policy for companies within the group, this case study will look at how to be best practice in a complicated environment. The company will also talk about the European legal framework that will impact hedging within European corporates.

Stefano Pierini: Responsabile Finanza, Ferrovie dello Stato, Rome, Italy

Adjourn to Day 3