Capital MarketsUncategorized
December 12, 2019

Group Therapy for FX Systems Pain: Misery Loves Company

FX managers for the most part like their systems. But there’s always that one thing that creates a headache. Leo Tolstoy famously posited that “All happy families are alike; each unhappy family is unhappy in its own way.” That line from “Anna Karenina” can definitely be applied to treasury practitioners and their systems. In a discussion at a recent NeuGroup meeting jokingly dubbed the systems “misery montage,” three FX managers members shared their biggest pain points, most of which derive from…
Capital MarketsUncategorized
December 5, 2019

No More Libor-SOFR 101, Please! Treasurers Want Implementation Details

Treasurers say they need specifics on market conventions to complete the SOFR risk puzzle. Many treasury teams don’t want any more bank presentations on Libor-SOFR transition timelines or the basics of risk and fallback language—they want details from bankers, regulators and industry groups on various market conventions. These include how exactly SOFR term rates will be calculated in the cash markets, specifics on any compounding methodology, settlement conventions like lookbacks, and the spread adjustment from Libor to SOFR.“We need details about the market…
Capital MarketsInvestment ManagementUncategorized
November 29, 2019

Prepare for a Surging Green Wave of ESG Products

By Joseph Neu BNP Paribas highlights a veritable tsunami of sustainability-linked finance products.   “Treasurers should be preparing for a tsunami of sustainability-linked finance products,” one NeuGroup member treasurer told me recently in response to market events of the last year. To underscore the importance of that notion, Hervé Duteil, chief sustainability officer for BNP Paribas in the Americas, presented his view to NeuGroup’s Tech20 Treasurers’ Peer Group last month. He described three big waves, or “revolutions,” in sustainable finance:…
Capital MarketsRisk Management
November 29, 2019

Concerns About the Transition from Libor to SOFR

(Editor’s Note–published November 29, 2019) Treasurers aren’t too happy about the fallback language for the Libor-to-SOFR switch. Members at a recent NeuGroup meeting used some colorful language in discussing the challenging issue of changing fallback language in contracts that currently use Libor, the benchmark rate that’s scheduled to disappear after 2021. The wording needs to specify what rate will replace Libor when it’s gone, what triggers the switch, and the pricing spread adjustment between Libor and the successor rate to…
Capital MarketsInsights NewsletterUncategorized
November 6, 2019

We’ll Get to Libor Later

By John Hintze Two surveys say nonfinancial firms are falling behind in Libor transition efforts. Nonfinancial companies are taking a passive approach to prepping for the transition away from Libor, relying heavily on their banks and other financial firms to carry most of the burden. According to recent surveys, however, the financial community is lagging. In its recently published “Liboration: A practical way to thrive in transition uncertainty,” Accenture spells out financial services firms’ lackadaisical efforts toward the transition, even…
Capital MarketsInsights NewsletterUncategorized
September 19, 2019

Sustainability and Smart Investing: Why the Buzz About ESG Is Growing

Interest in ESG investing is blossoming as companies search for purpose beyond profits.  WHY: You can do good and do well. Academic research cited by DWS “provides strong evidence that environmental, social and governance factors positively influence corporate valuation and investment performance.” Also: “ESG data can potentially help mitigate against both idiosyncratic and systematic risks.“90% of ESG study results demonstrate that prudent sustainability practices have a “positive or neutral influence on investment performance.“Key takeaway: Think about ESG as another risk factor in your screening criteria which…
Capital MarketsInsights NewsletterUncategorized
September 11, 2019

SocGen: You Have Less Floating-Rate Debt Than You Think

One big eye-opener for many attendees at NeuGroup’s Tech20 2019 first-half meeting was sponsor Societe Generale’s suggestion that their floating-rate debt capacity was higher than they (most likely) currently thought it was—provided they hedge their FX, that is. Why? Because, according to this view, the FX hedge program reduces one’s net floating-debt exposure. In addition, if you agree that a recession is coming, rates will be staying put or going lower, making floating debt even cheaper. It pays to favor…
BankingCapital AllocationCapital MarketsRegionalTreasury Management
January 23, 2019

The Five Cash Management Initiatives Treasurers Should Consider

When it comes to cash management, treasurers must keep their focus on ways to make it more efficient and cost effective. Editor’s note: This article was originally posted on on October 09, 2014. The year 2014 has been one focused on efficiency and innovation as treasurers consider outside-the-box strategies for unlocking working capital and improving the tactical aspects of treasury. Major initiatives including SEPA and the internationalization of the renminbi (RMB) have proven to be catalysts for greater global…
BankingCapital MarketsComplianceRisk Management
December 17, 2010

Checklist: What You Should Know About ISDAs

Understanding the standard document used to govern over-the-counter derivatives transactions.Based on many discussions with practitioners in NeuGroup peer groups, here is a checklist of things to consider when implementing ISDA Master Agreements (ISDAs). One of the first considerations is whether it is worth bothering to set up an ISDA with every counterparty. Only value-add banks, please. With limited trading capacity to spread around—as well as treasury bandwidth—practitioners agreed that firms should focus on the banks that are able to add…