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.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Data doubts undermine treasury use of risk quantification

Lack of confidence in the quality of their information – and their ability to analyze it – means many of the world’s largest companies continue to eschew one of the techniques designed to assess and manage FX risk.


A recent report from Greenwich Associates found that 60% of corporate treasury professionals felt it was not possible to establish best practices for FX. Yet only one in five of the large companies surveyed employ the variance at risk (VaR) framework – such as earnings at risk or cash flows at risk – despite its suitability for precision hedging strategies.

Cash flow at risk and earnings at risk take into account the relative volatilities and correlations of individual currencies when designing hedging strategies and incorporate cash flow and earnings implications in addition to payments.

Ken Monahan_160x186

Ken Monahan,
Greenwich Associates

“However, the methodology requires relatively good information management and access to sophisticated tools and datasets,” says Ken Monahan, senior analyst in Greenwich Associates’ market structure group and author of the report.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


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