Financial risk management in treasury

Paul Bramwell and Michael Bosacco

Journal of Payments Strategy & Systems, 2012, vol. 6, issue 4, 377-383

Abstract: A recent SunGard AvantGard study of 222 treasury professionals in more than 25 countries conducted in the second quarter of 2012 reveals how treasury professionals are addressing various aspects of financial risk. Having a strategy in place to deal with financial risk is of utmost importance to today’s treasury professionals in light of recent tumultuous economic conditions and failed financial risk policies. The SunGard study showed that corporate treasurers expressed the greatest concerns surrounding market volatility and eurozone defaults. The study also exposed several issues that could hamper effective risk management, including reliance on manual methods to conduct risk analysis and inability to measure real-time positions. Reliance on spreadsheets for conducting advanced risk analysis opens the door to significant operational error along with potential regulatory conflicts, while an inability to view market positions in real time could hamper the capability to manage market volatility in a portfolio. Going forward, an opportunity exists for companies to enhance their technology to address potential gaps in risk-management methods.

Keywords: financial risk management; treasury; value at risk; VaR; FX; cash forecasting; foreign exchange; counterparty risk; commodity (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2012
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