Issues on International Treasurer’s radar screen.
This week’s editorial meeting raised a number of issues starting with FX items being considered for upcoming peer group meetings, further consideration of issues related to procurement of banking services, including the potential need for treasurers to be focusing their bank counterparty and operational risk concerns on custodial banks.
FX issues. Both NeuGroup’s for foreign exchange managers will be selecting their fall meeting agenda’s next week. Issues topping the list of proposed agenda items include: a regulatory update with their potential impact and required actions; dealing with China and other emerging markets; management reporting packages on FX; hedge program performance calculations; best practices in risk analysis; a deep dive on cash flow hedging strategy and treasury systems implementation updates. Also, International Treasurer’s efforts to pin down banks on the efficacy of delta replication hedging for corporates have unfortunately stalled.
More on bank procurement. The NeuGroup will be analyzing results from a member-initiated banking business compensation survey, including composition of revolver groups and changes being contemplated for selection criteria. International Treasurer will compare the trend indicators against recent work that treasury consultants have been doing in this area.
Custodial bank risk. And speaking of bank procurement, recent back-and-forth between members of the Treasury Investment Managers’ Peer Group has involved the question of whether treasuries monitor and manage their exposure to custodial banks, including if any companies have been forced to spread the risk by adding a second or third custodian.