Centralizing foreign exchange transactions through a trading platform at its center of excellence in Dublin, Ireland, is giving General Electric Co. greater pricing power, and when you're GE and trade more than a trillion dollars a year in FX that means something.
Previously, the Stamford, Conn.-based appliance manufacturer and financial giant took a more decentralized approach to FX trades, relying on its business units geographically to take positions with GE's own banks and third-party banks, entirely as a service to its bank customers and not trading for profit. "Getting control over what our business units were doing globally in the way of FX was the challenge," says Dennis Sweeney, GE deputy treasurer. "In particular, we wanted to make sure there was no holding of positions, unmatched positions or speculative trading. We needed to centralize the activity of the different business units through a trading platform, thus gaining scale in pricing power because the trades are all coming through one legal entity to the Street."