Summary |
Books about financial risk management often focus on the structure and pricing of derivative instruments. Yet when Risk Publications researched this book, treasury staff in major corporations indicated there was enough published information available to them about contract types and trading tactics, while the bigger strategic questions about risk management- how it can be made to serve corporate needs and ambitions- remain obscure.
For example, before active risk management is even considered, how can the treasury team efficiently identify and quantify the financial exposures underlying the corporation’s business? Where exposures exist, will risk managing them add value for shareholders, or is it can expensive waste of time? If it will add value, how can risk management be structured, benchmarked and controlled using limited resources? These are significant questions: this book offers thoughtful approaches to finding the answers, rather than off-the-peg-solutions.
Treasurers also indicated that it would be useful to gain insights into risk management challenges outside the familiar territory of interest rate and foreign currency risk management- pension fund risk and commodity price risk were areas of particular interest. They also sought up-to-date guidance on issues that might affect a planned risk management strategy, such as accounting and tax practices for financial instruments, and the public disclosures they might be expected to make about their risk management strategies. Again, chapters in this book address these concerns from the particular viewpoint of a CFO or treasurer in a “non-financial” corporation.
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