FX risk management at the top of the agenda of corporate treasurers

FX risk is considered the 3rd most important risk by corporate treasurers.

Corporates’ perception of risk has shifted from 2010 to 2011. In 2010, 30% of corporates chose operational risk as their most pressing threat, while just 27% named FX risks as their most important risk area. These results correspond with the events of the past 12-18 months, which have seen increasing uncertainty in the financial systems, particularly in Europe. FX volatility and the increasing cost of bank credit have left corporates looking for other sources of liquidity and with that, an increased focus on risk in the supply chain.

Many of the respondents named other important types of risk that included commodity prices, bank counterparty risk, regulatory compliance, and technology disruption.

Source: The gtnews 2011 Financial Supply Chain Survey, sponsored by SEB, was conducted between 18 November and 16 December 2011. It polled 126 corporates, 37% of which were based in western Europe, 26% in North America and 21% in Asia-Pacific. Central and eastern European (CEE), Latin American and Middle Eastern/African respondents made up the remaining 16%. Thirty-two per cent of respondents came from companies with annual revenues of US$50m-US$249.9m, while 25% came from corporates with revenue of US$1bn-US$9.9bn. The highest proportion, 29%, of respondents came from the manufacturing industry.

http://www.gtnews.com/surveys/fsc/2011gtnewsFinancialSupplyChainSurvey.pdf