Treasury: Banks and corporates get back to basics

The impact of the wider financial crisis has forced firms and their corporate clients to re-examine the way they approach their foreign exchange business. A strong sense of realism bodes well for the market. Lee Oliver reports.

FOR MOST OF this decade, many corporates took it for granted that foreign exchange was a low-volatility product that was easy to hedge. That notion has been shattered. “The moves in the market over the past few months have resulted in many more corporates thinking about and trying to quantify their FX risks,” says Rashid Hoosenally, global head of FX structuring at Deutsche Bank.

The rise in FX market volatility has served as a rude reminder to corporates with currency exposure of the wisdom of prudently managing FX risk.

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