1 min readThis past month we wrapped up our third webinar on counterparty risk management, finishing the three part series we began last October. Our goal of the webinar series, hosted by ourselves and Strategic Treasurer, was to raise awareness of the challenges treasurers face in managing counterparty risk and, as a thought leader in the industry,…
2 min readAbstract In this research commentary, we offer a behind the scenes look at the credit approval process for cash investment portfolios. We discuss nine essential components to help clarify a process that can sometimes seem mysterious and intimidating. Beyond Ratings – What Makes Cash Unique The Credit Universe – It’s All About Supply Preliminary Screening…
1 min readTransparency is the new buzz for corporate treasury professionals in their constant pursuit to understand and track underlying risk. Like the shifting channels of the Mississippi River, credit exposures in investments and counterparties present continuously variable hazards to navigation. The credit crisis intensified treasurers’ efforts to understand their exposures, but too often formal reports were…
1 min readTransparency is the new buzz for corporate treasury professionals in their constant pursuit to understand and track underlying risk. Like the shifting channels of the Mississippi River, credit exposures in investments and counterparties present continuously variable hazards to navigation. The credit crisis intensified treasurers’ efforts to understand their exposures, but too often formal reports were…
2 min readIn October, short treasuries were whipsawed by political dysfunction with the threat of an “operational interruption” to Treasury bills that caused yields to soar above 50 basis points for October 17 maturities. This volatility followed on the heels of a Treasury rally in September which was induced by the Fed’s failure to announce a tapering…
2 min readAbstract The Federal Reserve introduced the new reverse repo facility to control the level and volatility of short-term interest rates, to help relieve repo collateral shortage and to better regulate the tri-party repo market. The likely impact includes the avoidance of negative yield, the addition of a high quality counterparty to the marketplace, more responsive…
2 min readRisk management is core to every treasury operation whether the organization is a biotech in phase III trials or a global Fortune 500 company. Large or small, an organization’s goals should be centered on selecting and monitoring exposures that are appropriate for its risk tolerances. Granted, staying consistently true to those tolerances is significantly more…
1 min readAbstract We introduce a capture-analyze-manage framework to counterparty risk management. The constant risk aversion principle and a credit risk scoring system may help organizations establish a target risk level and proactively manage their positions as conditions change. Introduction Although it’s been five years since the Lehman Brothers’ bankruptcy, many corporate treasurers continue to feel uneasy…
1 min readEach January our newsletter focuses on the likely challenges that cash investors will face in the coming year. Given how much has transpired in the treasurer’s world since the beginning of 2013, we thought that an update on the issues facing cash investors would be helpful. On June 5th the SEC voted unanimously to propose…
2 min readAbstract As we recap market developments in the first six months of 2013 and look to the future, we reflect on the following five observations from a recent liquidity conference: Low yield environment turning the corner; Corporate cash balances up, investors less worried; Supply still constrained, but more issuers entering the market; New money market…