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New survey reveals corporate treasurers’ concerns about FX risks

  • Survey conducted by by Schwabe, Ley & Greiner as part of preparations for upcoming conference in Mannheim

Vienna/Mannheim: Over a year after the decision by the Swiss National Bank to suspend the pegging of the Swiss franc to the euro, the hedging of FX risks remains a key focus of risk management among German corporates. As part of the preparations for the 28th Finance Symposium in Mannheim (20 – 22 April 2016), 262 corporate treasurers of large and medium-sized enterprises in Germany, in addition to 142 bankers, provided insights into the issues which they currently rate as most important.

For more than half of the corporate treasurers (57%) and bankers (51%) surveyed, the professional management of FX risks and appropriate hedging strategies are a focus of their risk management efforts. On the other hand, only 24% of the corporates and just under a third (30%) of the bankers currently regard Interest rate risks as particularly important. “Although this is understandable in light of the ongoing exchange rate volatility, corporates would be well advised however to keep a close eye on interest rate developments and to implement models for the calculation of interest rate risk. Forward-looking firms are already analysing the impact an end to the current low-interest period will have on them”, explains Jochen Schwabe, Managing Partner of Schwabe, Ley & Greiner (SLG) and co-founder of the Finance Symposium.

Investing in times of low interest rates remains challenging

The choice of the right investment strategy in times of low and even negative interest rates was already the key challenge in the area of asset management last year: This issue remains firmly on the agendas of more than half of the corporates (64%) and also 60% of the bankers surveyed. Nearly half (45%) of the corporates and 39% of the bankers ranked counterparty risk management as the second most important issue in asset management. “This highlights how important the stability and ratings of banking partners are to corporates. They deserve even more critical monitoring than ever”, according to Thomas Schörner, Partner at SLG.

In the area of treasury management, two thirds (66%) of the corporates and 40% of the banks continue to be occupied by the never-ending quest for the right cash flow forecasting strategy and associated reporting. Over half of the corporates (57%) and just under half of the bankers (48%) regard the issue of cash management and secure payments as a priority. According to Schörner: “The news of hacker attacks on corporate finance departments in recent weeks and months will further increase the importance of the complex issue of secure payments – among both corporates and banks.”

Keynotes by Guido Westerwelle and Gregor Gysi at this year’s Finance Symposium

These and other questions form the central issues addressed at the 28th Finance Symposium in Mannheim, which will be taking place this year from 20 to 22 April. Besides a wide selection of workshops on in-depth issues, there are also various fora which highlight diverse topics such as the security of payments, asset management in a low-interest environment, the consequences of consolidation in the banking sector, the financial strategy in 2016 from the CFO perspective and professional FX management.

The opening event on 20 April is a keynote by the former German Foreign Minister Guido Westerwelle on the importance of a united European front not only in terms of economic policy. On the last day of the conference (22 April), Gregor Gysi, until 2015 Chairman of The Left political party in the German Parliament, will be speaking about the boundaries of state influence in a global economy.

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