What’s on International Treasurer’s radar screen this week.
Several topics came up for discussion in this week’s editorial meeting. In the coming weeks, International Treasurer will explore the costs of booking trades from different locations. Also, companies and their banks and investment managers are getting creative in their search for return. We’ll also take a look at how a possible recession will affect corporates and whether a new currency war is brewing after recent moves by the Swiss National Bank.
Jurisdictions.
Do corporates sometimes insist on settling with certain legal entities of banks and does pricing differ for trades booked from different locations? Would banks start charging more for trades done in more expensive jurisdictions? That’s what we’ll take a look at in the coming weeks.
Still looking for returns.
With interest rates so low, companies (and everyone else) are searching far and wide for better returns on their investments. Some new portfolio strategies to be discussed at the next NeuGroup Treasury Investment Managers’ Peer Group meeting in October include more focus on emerging markets, an absolute return strategy as well as a stable high income line of attack. Otherwise, some companies are continuing to turn over every stone possible with some looking into mutual funds and ETFs.
Recession and treasury.
It’s still far from conclusive whether the US economy has entered (or is entering) a recession, nonetheless, companies should be prepared, particularly as it relates to banking relations. One subject that has come up in several NeuGroup peer group is the issue of financial institution exposure management. Certainly banks – particularly those in Europe – are under huge pressure in terms of regulations and overall business environment. A recession would just exacerbate banks’ woes.
Swissy.
This week the Swiss National Bank took the historic step of capping the franc. To combat the flood of investment into the country, which is causing the franc to spike and driving Swiss businesses to the brink of failure, the Swiss central bank is planning to buy euros in “unlimited quantities.” Another investment destination has been Brazil, which has implemented its own measures to stem the flow of money into the country. How does this impact treasury? Will it lead to an all out currency war, which most observers felt was sidestepped months ago?