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A hub of news on current industry and technical issues, advice and career development support.

Credit risk

What should you be thinking about and what do others think of your credit? Credit risk is one thing that treasurers must be concentrating on at the moment. The first part of this is to investigate what credit risks you are taking.

Is the spare cash of your firm safely invested and available when you need it? Are any derivatives that you hold at risk from failure of your counterparty? Are your customers a good credit for the amount you are extending to them. What are the implications of change in any area? The second part is to understand what others think of your credit.

The last man standing

It occurs to me, writes Peter Matza, that many treasurers will have taken on a role during the economic crisis of the past 18 months for which they may be ‘the last man standing’.

Supporting you through the downturn

We continue to be as active as possible in supporting our members with comment on the evolving issues within the financial markets. A number of us have been extensively quoted in the media (the Financial Times in particular) and have broadcast on Bloomberg, ITN News and the Today programme on BBC Radio 4.

In line with our stated policy we will normally comment first from the perspective of non-financial sector corporates.

ACT guidance for uncertain times

Given the extent of uncertainty and change in the financial market we are focused on providing timely and helpful advice to our members. The most recent example of this has been over the past weekend, when we worked to respond to press reports that banks are considering invoking market disruption clauses in loan agreements. We had excellent support from Slaughter and May.

Fund early, fund long

This has been the message from the ACT for the last few years – though what we actually said was “fill your boots” as we did not expect the then favourable market conditions to persist.

The message bears repeating – even in the current climate where bond markets are often closed and many banks don’t want to hear about anything longer than two days. If funding windows open, they are not a signal to relax but to fund while you can, even without an immediate need for the funds.

If you can keep your head when liquidity dries up

For the money markets liquidity is the problem says Martin O’Donovan.

The central banks have been working hard to supply liquidity into the inter-bank market and have just about been keeping the overnight rates near the official rates (Base Rate in the case of the UK), but the 3 month rates have stubbornly refused to follow suit and right now have ballooned out for sterling to 6.4% when base rate is just 5%. Clearly the banks are keeping their cash very short term and 3 month liquidity has disappeared.

The science and art of treasury management

In amongst the current financial market turmoil, suggests Peter Matza, there has been plenty of press comment about financial engineering, leverage and a whole host of other terms, familiar to treasurers but considered ‘toxic’ by market commentators.

The global treasury profession

With the strong international commitment in our qualifications, as well as our events and publishing, we are particularly conscious of the rapid growth of the treasury profession in certain key markets and geographies. Two of those on which we are focusing are Asia and the Middle East, where we already have a number of members. In the case of the former we have an established position, through our strong links with the Hong Kong ACT (which started life as an ACT regional group) and through all our qualifications but especially the Certificate in International Cash Management (CertICM).


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