BankingTalking Shop
January 7, 2021

Talking Shop: Allowing Vendors to Directly Debit Bank Accounts

Member question: “What are your policies with respect to allowing vendors to direct debit your bank accounts for invoices due? “Our policy does not support vendor direct debit of our bank accounts. We do have an exception process for situations where vendor stoppage may have material impact (i.e. utilities for a manufacturing plant) or the vendor requires DD and there are no other alternatives (i.e. postal service).“I think part of our position is a historical perception that it is ‘bad’…
Risk ManagementTalking Shop
January 5, 2021

Talking Shop: Remittance Verification Options for Treasury Payments

Member question: “How do others handle remittance instruction verification for treasury payments? Callback? Third-party service? Any ML or technology? “We are reviewing our verification process for remittance instructions for payments processed through treasury. Today, we require it to be on the bene’s letterhead, or bank letter, or imbedded in the contract, but have not implemented a callback. Who does the verification in your organization? Are you looking at any third-party services or ML-type models for additional controls?” Peer answer 1:…
Risk ManagementTalking Shop
December 17, 2020

Talking Shop: Net Investment Hedging When There Is No Underlying Income

Member question: “Do you hedge net investments where there is no underlying operating income or cash flows? “Curious what philosophy or triggers companies have around net investment hedging—and if any companies do NIH where they don’t have an underlying positive cash flow or plans to liquidate? For example, a region where you may have a lot of fixed assets but no material underlying revenues.” Peer answer 1: “At our company, we have to raise debt regularly, so our NIH program is…
BankingFXTalking Shop
December 15, 2020

Talking Shop: How Do You Restrict Trading for Currency and Bank Pairings?

Member question: “Question on restricting trading for certain currency/bank combinations: We have a few currencies that some banks have trouble settling with us (such as RUB). I want to avoid trading with these banks for those currencies. “Ideally, I could set up a rule in FXall to restrict specific bank/currency combinations. Does anyone have suggestions for doing this? Thanks!” Peer answer 1: “I believe that in FXall’s QuickTrade set-up, you can select/designate standard counterparty banks to populate for specific currencies…
FXRisk ManagementTalking Shop
December 10, 2020

Talking Shop: What Did Your Transition Plan to Hedge Accounting Look Like?

Member question: “What did your transition plan to hedge accounting look like? “We are planning to adopt hedge accounting in the future. In terms of transitioning a book of hedges to designated hedges, we will close all existing undesignated hedges and put on a new book that is designated at inception.“We are curious how others have put on these new hedges. How long did you take to put on hedges? Did you trade all at once, daily, weekly, etc.? Also,…
BankingFXTalking Shop
December 1, 2020

Talking Shop: Whom Do You Pay Using Your Offshore Renminbi Account?

Member question: “Has anyone opened a CNH (offshore renminbi) account? And if so, what do you use it for? Do you: a) pay onshore China vendors, b) offshore vendors?”Peer answer: “Yes, we have a CNH account in Singapore. We bill to our local distribution entities in local currency and we use the account for intercompany receivables before converting to USD. We make FX settlement payments from the account.” For more insights on trends in Asia from NeuGroup Members, read founder…
Capital MarketsTalking Shop
November 17, 2020

Talking Shop: Applying the End-User Exception From Dodd-Frank’s Swap Clearing Mandate

Context: In 2013, section 723 of The Dodd-Frank Act went into effect, which required all commercial end users of swaps to submit the swap to a derivatives clearing organization. A so-called “end-user exception” allows parties to claim exemption from the clearing mandate and continue executing uncleared swaps with their dealer counterparties if one of them: Is not a financial entity.Is using the swap to hedge or mitigate commercial risk.Provides certain information to the CFTC, including how it generally meets its…
Talking ShopTechnologyUncategorized
November 12, 2020

Talking Shop: Making Interactive Dashboards With Power BI and SQL

Member 1: “I was encouraged to hear that others are using SQL (structured query language) + Power BI tools to automate reporting and develop interactive dashboards. We have been on a journey the last three years to do the same and would welcome a breakout discussion on best practices and forward looking vision for using these tools.”Member 2: “I’d be more than happy to share what we’ve developed and are working on! SQL is a great way to start in BI;…
BankingTalking Shop
November 10, 2020

Talking Shop: Should You Bank Where Your Customers Bank?

Member question: “This question is about the cultural practice of banking where our customers bank. With today’s technological abilities this makes no sense to me. Do other companies have this practice? Has anyone had success in changing this behavior pattern of banking where your customer banks? “The example I am currently dealing with is in Korea, where large customers use and although they are not a preferred bank partner, we seem to be using them because these customers bank there…
FXTalking Shop
November 5, 2020

Talking Shop: Taking the Pulse on Forward Points in Balance Sheet Hedging Programs

Member question: “How do those with balance sheet hedging programs account for forward points—are they included in earnings before interest and taxes (EBIT), below the line, etc.? “We are considering implementing a balance sheet hedging program for net liabilities that are not part of our cash flow hedging program. ​Forward points are a concern since i) they work against us and ii) they may introduce volatility if the hedge is not valued at spot while the underlying exposure is. Any insight…