Money Maze Mappers: The Track to Good Treasury

by Helen Castell, Senior Reporter, TXF

As uncertainty over the future of US trade policy, regulation and taxation, and the UK’s Brexit negotiations inject volatility into foreign exchange (FX) markets, corporate treasurers are under more pressure than ever to make fast and accurate risk management decisions.

But according to findings from last month’s Citi Treasury Diagnostics report, while most corporate treasuries have mature risk management programmes in place, many are not nuanced or nimble enough in how they manage risk on the currencies that have most power to upset their earnings.

So, at a time when the expanding role of treasurers means they are already being pulled in various directions, which risks should top their priorities, how important is automation, and why is now the right moment to ask for additional tech spend?

Geopolitics

The damage that currency moves following the UK’s Brexit vote and Trump’s election inflicted on corporate earnings proved a wake-up call for many corporate treasurers. “Surprisingly, people didn’t hedge very well for Brexit,” says Mark O’Toole, vice president of commodities and treasury solutions at treasury and risk management software vendor OpenLink. “They just wanted to trust the polls and nobody was trying to come up with a strategy to the downside.”

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