Specialised risk management and measurement

Balance sheet risks measurement and management for non financial institutions

The risks included in the categorisation include: liquidity, investment, interest and foreign exchange and commodity risk.

In recent years treasurers have begun shaping a more strategic, value-added function to improve the bottom line and enhance shareholder value. The economic environment has eroded revenue and put more emphasis on efficiency to sustain profitability. Continuing global economic and liquidity pressure means that traditional external liquidity sources become less accessible and/or more expensive, so enterprises must mobilise internal liquidity to maximise yields and lower funding costs. Optimising working capital to cost-effectively fund vital business requirements becomes a key objective, with the efficient use of liquidity a critical component.

In the field of balance sheet risk management, Reply can support you by:

  • Formulating and rolling-out treasury information frameworks, definition of responsibilities, roles and regulatory requirements;
  • Aligning and improving the current operation of the treasury function with an enhanced mission;
  • Delivering overall cash management infrastructure and frameworks;
  • Delivering cash pool optimisation techniques;
  • Implementing qualitative and quantitative frameworks for liquidity, interest rate risk, foreign exchange, counterparty management and capital;
  • Delivering foreign exchange management processes that capture daily rolls, economic, transaction and translation factors with prescribed ownership and effective methodology;
  • Building more effective cash forecasting and liquidity pool methodologies;
  • Balancing hedging and supporting processes and risk applications under regulatory accounting and economic incentives;
  • Implementing the processes and analytical framework required to support daily funding, foreign exchange management, capital management and interest rate risk management;
  • Integrating treasury funding, foreign exchange, interest rate risk and liquidity;
  • Reviewing and delivering transfer price or funding incentives;
  • Building and implementing effective risk-based capital charge back mechanisms;
  • Delivering an investment and counterparty risk framework that includes measurement, controls, systems, policies and procedures;
  • Designing and delivering optimal capital management processes that structure funding and investment to optimise capital placement;
  • Delivering centralised corporate management of residual and capital interest rate risk exposure through Value at Risk, Cost to Close, earnings, stress and other analysis techniques.

Contents about - Tag: Specialised risk measurement and management for non financial institutions