A new report from the Conference Board – which tags itself as the global, independent business membership and research association that works in the public interest – suggests that the buy side is largely satisfied with the service and products provided by its FX sell-side counterparties. The report was due to be published in 2008, but the board felt that the findings needed to be further validated following the sharp rise in volatility as the financial crisis unfolded.
“Though firms feel the impact of increased exchange rate volatility on their businesses, they aren’t changing their hedging strategies in response to the higher risk,” says Rainer Schultheis, vice-president and managing director for The Conference Board Europe, Middle East & India, and author of the report.
The new report is based on a 2008 survey of 227 global companies, plus a 2009 pulse survey to gauge the impact of the financial crisis. It finds that companies are generally satisfied with the financial hedging instruments available and that corporate treasurers prefer central banks not to intervene to stabilise rates – probably because they invariably only add to volatility and uncertainty.