Financial Risks Loom Larger

But portion of treasurers hedging FX risk declines, survey shows.

Financial risks present increasing challenges for corporate treasurers, with 58.8% of the treasurers who responded to a recent survey by consultancy TreaSolution saying financial risk management has become more difficult over the last year, up from the 44.9% who said that in 2011.

The heightened concern probably reflects a range of issues, including the European debt crisis and the prospect of new regulations regarding derivatives, says Daniel Carmody, managing director of Chicago-based TreaSolution.

The survey suggests that corporate treasuries continue to reduce the number of their banking relationships and bank accounts. On average, the respondents had 15.4 banking relationships in 2012, down from 23.5 in 2007, and 190.9 bank accounts, down from 245.9.

“Organizations are concentrating their efforts with strategic banking partners,” says Carmody, and links that trend to concerns about financial risk. “They’re looking at counterparty risk and saying, ‘Exactly who should we be doing business with?’”

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