September 01, 2020

Top 5 Balance Sheet Hedges That Create Risky Positions

Posted by Jeff Goggins
Once a company establishes a balance sheet program, it likely runs on auto-pilot from then on. Exposures are gathered, forecasted, netted, hedged and adjusted inter-month, and the results of the program are reported — but rarely is there a ...
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August 31, 2020

What to Watch for as LIBOR Fades Into History

Posted by Ruth Hardie
Businesses mired down by the impacts of COVID-19 are facing enough difficulties. But the march to LIBOR’s end has continued unabated. Governing bodies across the globe have made it clear that LIBOR will not extend beyond 2021. To date, we have...
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August 27, 2020

SOFR: Key Characteristics & Hedge Accounting Impacts

Posted by Ruth Hardie & Farah Lotia
As many of our readers already know, SOFR (Secured Overnight Financing Rate) has been selected by the Alternative Reference Rates Committee of the Federal Reserve to replace LIBOR in 2021. LIBOR represents the rate member banks borrow from each...
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July 02, 2020

Top Benefits & Limitations of FX Hedge Programs

Posted by Glenn Suarez
To implement a successful hedge program, it’s important that all parties involved know exactly what the hedge program will provide. This prevents disappointment and level sets expectations with management. Here are some common benefits FX hedge...
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June 30, 2020

Last-of-Layer Hedging for Financial Institutions

Posted by Ruth Hardie
Lenders such as banks, mortgage lenders, and credit unions manage large portfolios of fixed-rate loans. Typically, these assets are funded with floating-rate liabilities. This mismatch between fixed-rate assets and floating-rate liabilities can...
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June 25, 2020

6 Translation Accounting Nuances You Should Know

Posted by Jeff Goggins
The translation process converts local currency financial statements of subsidiaries into USD based financials for consolidation and reporting purposes. This is a relatively simple accounting process that’s typically performed by software in...
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June 23, 2020

Leveraging Cross Currency Net Investment Hedges to Boost Earnings Through Interest Income

Posted by Glenn Suarez
Using a Net Investment hedge strategy to boost income has been around for decades, but the ultra-low interest rate environment in Europe combined with the new rules under ASU 2017-12 has renewed curiosity in this approach. By utilizing a...
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June 18, 2020

For the Urgent Hedger: Cash Flow Hedging Made Easy With Hedge Trackers

Posted by Lorraine Popylisen
Do you need to implement a cash flow hedge program quickly — either due to urgent management directives, Board member mandates, or competitive pressures? It happens all the time, leaving treasurers and decision-makers to scramble to come up with...
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June 17, 2020

Special Hedge Accounting: Why Functional Currency Matters

Posted by Lorraine Popylisen
A common misconception is that if you have a foreign currency transaction, you can simply hedge it and apply special hedge accounting. However, the fact is that sometimes an exposure can be hedged, but it will not qualify for special hedge...
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