Search
 

All Eyes on FX Risk

As turbulence rocks the currency markets, companies look to new tools to find hidden exposures and new tactics for hedging.

By Richard Gamble | Updated on September 01, 2009

Volatile currency markets and a blindness to some exposures were taking some nasty swipes at the income of $1.3 billion ADC, a Minneapolis telecommunications equipment company, in late 2008.

“We believed that we were doing the best that we could with our existing tools and resources,” reports Jason Cohen, vice president and treasurer, “but as the market became more volatile we knew there were exposures on our books that we weren’t finding or hedging. We have 3,000 [general ledger] accounts, and the only way we could have found those exposures with our old system would have been to go through all those accounts one by one. We didn’t know exactly what we were missing as the environment turned more uncertain, but we knew we were not satisfied with the results.” About 40% of ADC’s business is international and it has exposure to approximately 60 different currency pairs.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

 

Recommended Stories

U.S.-China Audit Agreement Draws Criticism

U.S.-China Audit Agreement Draws Criticism

Jessica Seah |

Although the deal has potential to ease trade tensions, a failure to effectively implement it might actually lead to further damage to the U.S.-China relationship.

Planning Liquidity in Times of Uncertainty

Planning Liquidity in Times of Uncertainty

Tom Hunt & Mariam Lamech |

Responses to the 2022 AFP Liquidity Survey reflect treasurers battening down the hatches as they prepare for an extended period of unpredictability and likely volatility.

Optimizing Cash Requires a Remodel

Optimizing Cash Requires a Remodel

Eric Krell |

As interest rates rise, treasury teams should re-evaluate cash forecasting models to be sure they fully understand the risk associated with a pursuit of higher returns.

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2022 ALM Global, LLC. All Rights Reserved.