Currency risk exists in most corporations as well in many investment portfolios. In the case of corporations, the presence of currency exposure is not always well identified, monitored or managed. Also, the risk of currency exposures from a FX market perspective or from a FX transaction perspective is not always fully understood and therefore not effectively managed. Corporations may have foreign exchange risk due to business activities/undertakings which result in assets or liabilities denominated in the currency of countries other than the home currency of the corporation in question and may not be identified and evaluated.
It is important that a corporation understands the presence of its currency exposures and have policies and procedures for managing its currency exposures and the execution of its FX transactions. This presentation will address the identification of a corporation’s possible currency exposures, the market and transactional risks associated with such exposures and the management of these currency risks. The review of the management of the execution of FX transactions in this presentation will also be of value to the management of currency exposures in investment portfolios as well as to banks that are currency service providers
Why You Should Attend:
To establish a framework of thought for developing or refining a corporation’s and investment manager’s currency policies and procedures.
A corporation must know the degree of currency exposure present in its businesses and a portfolio manager must know the currency exposures in the portfolios it manages.. Having well defined and constructed policies and procedures for managing its currency exposures as well as providing for the sound execution of its FX transactions is essential to the effective management of this major area of risk. Currency exposure management can be very complex in nature depending on the primary business activities of a corporation and the nature of the currency exposures it has.
In addition, many corporations as well as asset managers are not fully appreciative of the risks associated with the components of a foreign exchange transaction. This presentation provides for a thorough review and understanding of currency exposure management within a corporation by addressing the thought process for identifying and monitoring the presence of currency exposures within a corporation and within an investment portfolio and establishing for both corporations and investment managers the practices for the ongoing management of its FX market exposures and the execution of it FX transaction requirements.
- Currency exposure identification
- FX market risk
- Review of FX transactional considerations
- Risks stemming from FX transactions
- FX provider selection considerations
- Management of FX transaction risks – Best Practices
- Hedging or not to hedge
- Methods of hedging
- Execution of FX transactions
- Confirmation of FX transactions
- Settlement of FX transactions
- Currency exposure management within a corporation
- Senior and executive with currency management oversight
- Corporate Board members with risk management oversight
- Staff of businesses which generate currency exposures within a corporation
- Compliance management within a corporation
- Risk management within the corporation
- Auditing within a corporation
- Asset managers with foreign currency assets in their portfolios
- Banks serving as FX Service Providers
- Educational programs at the University level