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Thursday
Jun032010

Company Treasurers Respond to Riskier Times

The collapse of certain major banks may seem like a long time ago now.  But in fact I am still seeing plenty of reverberations going through the economy and businesses as a whole.  The realisation that perhaps banks are not always 100% stable has led to new measures being put in place in certain quarters.

Company treasurers in particular seem to have found their roles changing as time has gone on.  For example credit risk is now seen as being more important, as is counterparty risk.  This basically describes a situation where the other party in a financial agreement could default on the agreement they made.  I have also noticed commodity risk has become more important since these bank failures took place.

PwC (otherwise known as PricewaterhouseCoopers) produced a survey which took into account the feelings and views of thousands of company treasurers across the UK.  I was interested to see this survey found that a full four fifths of company treasurers deemed counterparty risk to be very important.  If we compare this to figures obtained before the recession and the banking crisis took place, we find that the figure has more than doubled.

This is good news for companies I think, because they are in a better position to ward off any potential problems which could occur.  But with that said it will be interesting to see if this position lasts.  Perhaps when things settle down again we could see a return to older and more relaxed ways, although I don’t think that would be a good thing.

If you wish to discuss any financial aspects of your company with professionals in the industry, talk to us here at St Matthews now.

 



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