Delay US non-cleared margin rules, industry tells Congress By Peter Madigan June 14, 2016 “If I was a European entity and I had the choice of facing a European bank or a US bank, one who was subject to US margin rules that started earlier and another that is subject to European rules that had not come into effect, if those start dates did not match I would have an incentive to trade with the European bank,” said Luke Zubrod, director of risk and regulatory advisory services at Chatham Financial, which advises derivatives end-users. “That is a real-world implication of that misalignment on those dates. We should endeavour to move forward in lockstep with Europe.” Read More *Registration may be required for Risk.net

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New York Cash Exchange (NYCE) June 1–3, 2016 New York, NY, USA: NYCE: On June 1st, Chatham Financial, along with Ortho Clinical Diagnostics, will be presenting “Tired of the FX Surprises? Leading Practices in Developing an FX Hedging Program” at 4pm in the Murray Hill East Room at the 34th Annual New York Cash Exchange Conference at the Hilton, New York, NY. We will also be exhibiting (Booth 112). New York Cash Exchange (NYCE).

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The Black Swan of Leicester Last summer, London bookmakers were updating their odds list for the most outlandish possibilities. Cantankerous TV personality Simon Cowell to become Prime Minister: 500/1. The Loch Ness monster to be discovered: 500/1. Her Majesty the Queen to release a chart-topping hit that Christmas: 1000/1. Kim Kardashian to become US president: 2000/1. Elvis to be found alive and well: 2000/1. But then the bookies took a more preposterous step; they offered 5000/1 odds that humble soccer team Leicester City, having barely escaped being relegated (i.e. unceremoniously dumped to the lower leagues) the season before, would win the English Premier League. Now the English top-flight soccer league constitutes a pure plutocracy – the wealthiest clubs buy all the best players, and with neither annual draft nor salary cap to restore some semblance of parity, the top five…

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A Hedge! A Hedge! My Kingdom for a Hedge! Four centuries ago, the most influential English-language playwright in history was laid to rest in Stratford-upon-Avon. Yet since April 25th, 1616, William Shakespeare has captivated four centuries of audiences and readers with his masterful dramatic arcs, playful neologism, and comprehensive depiction of life’s full breadth. In fact, Shakespeare’s astonishing thematic scope led Ralph Waldo Emerson to declare: “What point of morals, of manners, of economy, of philosophy, of religion, of taste, of the conduct of life, has he not settled? What mystery has he not signified his knowledge of?” As we reflected on Emerson’s adulation, it dawned on us that if Shakespeare really did settle all points of the economy, he must have written plenty about risk management. We spent the weekend curled up with our college Shakespeare text and, as…

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LinkedIn Pulse: Foreign Exchange Risk in 2016: Laying the Foundations for Managing Value By Victoria Bell March 3, 2016 With the UK Referendum on EU membership scheduled for 23 June 2016, currency volatility is front and centre of many companies’ agendas. However, for businesses with multi-currency operations, volatility has been a concern for some time and the recent slide in Sterling is one of many considerations, with the US Presidential election, the stability of the Eurozone and the growth prospects for China ever present in the background. Company boards, Audit Committees and shareholders are increasingly considering risk management strategies in relation to foreign exchange, questioning whether their current strategy remains relevant in changed and changing market conditions. Questions we hear on a regular basis include: What happens to our business if GBP-USD moves 10%? Why would I take risk management…

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Common Challenges to Hedging FX Risk Chatham Financial White Papers – October 2015 Early 2015 ushered in currency volatility and dollar strength unseen in decades. Every day, new headlines of companies negatively impacted by large exchange rate movements greeted readers of financial news. Earnings calls are littered with references to “constant currency” impacts and earnings forecast reductions driven by significant currency movements. With this background, analysts, investors, Board Members and senior management have asked, “What is stopping us from hedging our risk more effectively?” This article will cover three key hurdles that companies face when crafting and maintaining currency hedging programs: Data, Design, and Accounting.

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The human ear can only simultaneously comprehend two, or at most three, distinct melodies. Even renowned classical composers generally don’t aspire to create pieces that exceed this number of tunes played concurrently – the sheer volume of melodic combinations renders it unthinkable to write coherent music. The single glorious exception in history is the final movement of Wolfgang Amadeus Mozart’s final symphony, popularly called the Jupiter symphony. In this stunning tour de force of musical composition, Mozart introduces five separate musical themes, then closes with a fugato counterpoint in which all five play simultaneously. The result is not discordant but stirring and sonorous, even as themes frolic about from strings to horns to woodwinds at a pace the human mind cannot possibly focus on or comprehend. Harvard musicologist Robert Levin told NPR about the symphony’s finale: “At the very end,…

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Eight days after the Super Bowl, NFL fans worldwide are still talking about that play call. With 2nd and goal at the Patriots one-yard-line, trailing 28-24 with less than a minute on the clock, the Seahawks had strong alternatives at their disposal. Their powerful running back Marshawn Lynch, nicknamed Beast Mode for his ability to run through would-be tacklers, had bulldozed to more than 100 yards in the game already. Their ever-elusive quarterback Russell Wilson had slipped through the fingers of blitzing defenders more than once. Run a single yard, and their opponents would fall behind with less than thirty seconds to kick a game-tying field goal. Instead, the Seattle coaching staff stunningly selected a slant pass to their wide receiver, Ricardo Lockette, whose route would take him straight into the heart of the densely-concentrated Patriots run-stopping defense. The pass…

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A Framework for Balance Sheet Risk Management November, 2014 Interest rate risk management is top of mind for senior managers at many financial institutions right now. With so much uncertainty around the timing and magnitude of any changes to the federal funds target rate, it’s understandable that everyone from board members to investors to regulators wants to know exactly how the institution is positioned, and whether it will benefit or suffer when rates begin to change. While FIs are generally willing and able to tackle their interest rate risk, too often the focus is on a specific transaction, rather than an assessment of whether and how the transaction fits into the overall interest rate risk mitigation strategy. This bulletin lays out a simple, yet powerful balance sheet risk management (BSRM) framework that can be used to evaluate an FI’s exposure…

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Shaping Up Commodity Risk Management October 29, 2014, Treasury & Risk By Phil Weeber and Bryant Lee How to build a program that mitigates the company’s exposures to commodity price swings. Download Complete Article

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