By Ted Howard
In the November issue of iTreasurer, we discuss a couple of kinds of threats: activist and cyber. While the former are perhaps less odious than the latter, they’re still a concern and need to be dealt with effectively. This month iTreasurer also touches on new projects FASB is working on, as well as a new exchange for distributed-ledger transactions.
In “Activism Is Up, Are You Ready?” we discuss what some companies are doing to prep for what’s becoming an inevitable occurrence: an activist investor looking to stir things up. As mentioned, that’s becoming uncomfortably close to a “not if, but when” scenario. “There’s no corporate structure these days that is perfectly immune to activism,” says Lawrence Elbaum, Counsel, Commercial and Business Litigation at the law firm Vinson & Elkins. “If an activist finds a thesis, they’re going to find a way to champion that thesis by leveraging the company’s shareholder base and defensive structure. They’ll find a way to make noise.”
Then, we explore the coming disruption in the global trade finance market that’s forecast in a report from Greenwich Associates. That reflects a number of crosscurrents in the sector, including a new strategy among big banks of leaving the door open for smaller players—both bank and nonbank—as well as technological change. All of which means there could be a lot of turnover in the sector. Greenwich “projects that among large companies using trade finance, approximately 45% of companies in the US, about half of European companies and approximately 80% of Asian companies will shift business among trade finance providers in 2018.”
This month’s peer group summary is of the NeuGroup’s Corporate ERM Group. At the group’s last meeting, members exchanged views on cybersecurity and data privacy regulations, and how the biggest cyber risk threats are not external forces but the internal forces in a company. They also talked about ERM reporting and moving beyond heatmaps, and looked at new ways to illustrate risk to stakeholders.
Also in October, an intrepid Anne Friberg travelled to Barcelona to lead a panel discussion at EuroFinance’s 26th annual conference. What we learned: It’s an issuer’s market for investment-grade corporate bonds, agency ratings are useful for many things, working capital is strategic, and European money market reforms are here.
There’s some good news for cyber insurance shoppers. Despite the continuing steady flow of bad news about major companies getting hacked, cyber policy premiums have continued to fall and their coverage has increased. That’s because with increased competition rates are coming down. So if you’re in the market for cyber insurance, now is the time to buy.
And companies that have agreed to accept digital currencies like bitcoin and Ethereum have faced the same hurdles other new pay schemes have faced. But a recently approved derivative exchange and clearinghouse may prove to be the facilitator the sector has been waiting for.
Finally, iTreasurer delves into a recently published a white paper from the International Swaps and Derivatives Association that seeks to bolster efforts to harmonize regulatory regimes worldwide and ultimately ease the regulatory burden on swap market participants.
Enjoy.