Post Brexit: Managing FX Risks in Three Steps

by Dipak Khot, Head of FX Solutions EMEA and, Gareth Lloyd-Williams, Head of UK Corporate Sales, HSBC

The result of the UK’s recent Brexit referendum was a shock to many, despite polls predicting a knife-edge result. The result itself was a surprise but the market events which unfolded once the ‘leave’ vote was announced revealed some of the most experienced risk management professionals were unhedged against a weaker GBP or out of the money on long GBP exposures. This stark example of event risk has emphasised the importance of a strategic hedging programme rather than a reactionary approach and should prompt many companies to re-assess their existing treasury policies and risk management approach.

HSBC has many years of experience in following the world’s most significant risk events, and a wealth of expertise. The bank is proactive in working with customers to define and implement hedging programmes which combine stability and dynamism to reflect changing market conditions.

Treasurers need to have a hedging programme consistent with their internal treasury policy and such policy in turn has to match the underlying business requirement, this varies from sector to sector or from company to company depending on global exposure.

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