The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Counterparties: A question of trust

The financial crisis has prompted corporates to scrutinize more closely the risk presented by their bank counterparties. Laurence Neville reports.


FOR CORPORATES, THE financial crisis that erupted in September 2008 brought to the fore an issue many had scarcely considered in relation to their bank providers: counterparty risk. The implosion of Lehman Brothers demonstrated for the first time in a generation that big-name banks can disappear, with all the negative repercussions that entails for their clients.

In the months that have followed, some banks have lost business as corporates have reacted to concerns about their solvency and sought to diversify the risks presented by their treasury providers. More generally, counterparty risk has been elevated to a board-level concern – for a while in the autumn it was all boards talked about – bringing an enhanced role for corporate treasuries.

"Counterparty risk was not perceived as key risk until the crisis," says Vineet Sood, head of treasury at IT services and outsourcing company Tata Consultancy Services in Mumbai, India. "After the events of September and October we immediately determined to reduce our counterparty and concentration risk."

Implications of a counterparty crisis

The long-term contracts for many treasury activities such as cash management mean that in many cases corporates were not able to react immediately to the banking crisis.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree