Treasury Today January/February 2020

Published: Jan 2020



Welcome to 2020. It’s going to be… interesting!

In 2019, political risk-watchers were spoilt for choice. But from the Brexit saga, to drone strikes in Saudi Arabia, the conflict in Syria, the US-China trade war, protests in Hong Kong, the threat of a global recession et al – it all added up to one big headache for treasurers.

Charged with mitigating both macro-level risks – potentially impacting all businesses – and company – or industry-specific micro-level risks, it was evident that the way in which treasurers handled such events could substantially impact financial performance.

With all of the above occurrences as yet unresolved, expect 2020 to deliver risk in much the same vein. And no doubt there will be additional concerns to muddy the waters for those who pilot the finances of the world’s corporates.

The pervasiveness of political risk is why we have prepared the first Insight & Analysis piece of the year on this very issue. Of course, treasurers cannot prevent these events from happening but a degree of mitigation is possible. We explore the first steps towards identifying, quantifying and responding to the wide-ranging threats being faced. Tip: Maplecroft’s annual Political Risk Atlas is a very useful starting point for identifying future risk events!

From a multifarious overview of political risk, we take a deep dive into the murky world of sanctions screening. In this article, we offer professional views on how treasurers can ensure their organisations are fully aware and compliant. Shifting the risk stance slightly, we also explore ways in which commodities risk can be managed, assessing the current crop of tools available to treasurers.

We then take a diversion away from risk, towards the latest trends in cross-border payments and correspondent banking, and then explore how treasurers can get the most from their pre-bond issuance, IPO or direct investment roadshows.

One thing is certain, as we leave the volatility of 2019 and move into the New Year, treasurers should remain alert because, globally, we all seem to have fallen foul of the ancient (and apparently mythical) Chinese curse: “may you live in interesting times”!

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