For 20 years, International Treasurer has been helping corporate treasury navigate the ever-complex world of global finance.
It was 20 years ago today that International Treasurer published its first issue. The goal of the newsletter, as specified in the mission statement printed in that March 7, 1994 issue, was “to provide you with the information and analysis you need to succeed at one of today’s most demanding corporate functions: international treasury.” That’s just as true today as it was when the newsletter launched.
And a timely launch it was. In the first year of publication (see a copy of that issue below), derivatives debacles at Metallgesellschaft, Procter & Gamble, Gibson Greetings and Barings (among others), were the key spurs for widespread re-examination of hedging practices by corporates and regulators, and kicked off disclosure and accounting initiatives that are still being debated by treasury 20 years later.
And amid the heat of these debacles International Treasurer was able to clarify its focus on financial risk management by adopting the tagline: The Journal of Global Treasury and Financial Risk Management. From then on, derivatives, seen from an accounting to a tax planning perspective, along with risk measurement (JP Morgan’s RiskMetrics) and counterparty risk concerns (due to Barings loss and the Banker’s Trust suits) became regular features. Risk management brought treasury out of its ivory tower.
But it wasn’t just the specters of Metallgesellschaft, P&G and Gibson Greetings that piqued treasury’s interest in risk management. Regulators were also drawing lines in the sand. It was 1994 when the Securities and Exchange Commission first floated proposals for public companies to disclose their use of derivatives in any meaningful detail (eventually shot down of course). The Financial Accounting Standards Board did the same, and began honing what became the concept of hedge accounting into the headache that would become FAS133 six years later. The Office of the Comptroller of the Currency issued a report on bank responsibilities to their derivatives market clients, and the G30 put out a report on best practices for derivatives end users.
Despite all the chaos of those days, from International Treasurer’s first issue the editors argued that corporate treasury had to take responsibility for its own fate. And the key issue was then, as it is now, that treasury and hedging in particular is not a profit center. In “Lessons from Metallgesellschaft” in the inaugural March 7, 1994 issue, International Treasurer wrote, “…they presented their use of derivatives as hedges when at the end of the day they were not. Falling prey to a trader’s mentality, the company used them to build financial transactions that would not stand in the face of market elements.”
In 2014, much if not all of that “trader mentality” has been pushed out of corporate treasury, with a more sober, analytic and strategic mentality taking its place. But this doesn’t mean there aren’t landmines still out there waiting for the unsuspecting treasurer to trigger. In the coming days International Treasurer will become iTreasurer, to recognize the more global aspects of the treasury function. But whatever the name, the publication will continue its mission of guiding treasurers through twists and turns of the global financial landscape; to “provide you with the information and analysis you need to succeed.”
The First Issue, March 7, 1994