March 17, 2012
The Ramifications of the Euro Crisis
Adapting to a changing environment
A wide range of topics on the agenda included the following when the NeuGroup’s T30 came
together for its fall 2011 meeting:
1) Treasury’s changing role. Treasurers are helping companies understand the key drivers
of EPS and valuation as part of capital structure optimization.
Key Takeaway: Cash distribution policy will be the focus for most future capital structure optimization and
valuation enhancement discussions.
2) Addressing the euro crisis. Eliminate most direct exposures and allow treasury tofocus on more challenging
indirect exposures.
Key Takeaway: With the lack of legal certainty on a euro disruption, it’s difficult to predict.
3) Counterparty Risk. Counterparty risk management is job one for treasurers; commercial counterparties are the
biggest concern.
Key takeaway: Supply-chain finance schemes may need to be rethought to account for bank delevering.
4) RMB Opportunities. The offshore RMB provides MNCs with new alternatives to transact with Chinese
counterparts and move funds cross-border.
Key takeaway: Look for netting and notional pooling of onshore and offshore RMB funds to be introduced in the
near future.
5) World-class coverage. The focus emerging markets and crisis management places a premium on effective
treasury coverage.
Key takeaway: Tax-driven corporate structures are becoming a bottle-neck to efficient treasury operations.