The foreign exchange problem

Article Abstract:

Companies involved in overseas markets face the risk that the changes in the value of one currency against another could lead to significant losses. Fortunately, there are many ways by which these companies can manage their foreign currency risk, a practice more commonly known as hedging. Hedging is defined as the partial or complete removal of risk through certain compensating action. Easier techniques include invoicing in sterling and requesting payment in sterling, leading and lagging, netting and multilateral netting, matching, and asset and liability management. Harder but more valuable approaches include forward markets, money market hedge, futures and options.

Methods, Management, Hedging (Finance), Foreign exchange

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Managing global risk

Article Abstract:

Former IMF chief economist Kenneth Rogoff discusses about the risks to globalization in a turbulent world. According to him, many companies become more globalised with far-flung production and sales chains, and top executives have become more interested in understanding global macroeconomic drivers when it comes to managing risk.

Asset & Risk Management, Analysis, Risk management, Interview, Macroeconomics, Rogoff, Kenneth

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