Treasurers are consistently faced with the challenge as to whether they should conduct FX risk management. This decision is based on market risk, volatility in exchange rates, cost of carry, and the ability to forecast currency requirements. The traditional tools available in the marketplace, including spot, forward, swap and options all require commitment to trade on specific notionals and tenors. Setting up the process to execute FX hedges and swaps, with all the variables around forward/swap prices, currency pairs, tenors, and trading is a task for which treasurers require technical and strategic support. Bank of America has invested in an innovative automated FX solution to de-risk currency exposures in global markets without needing a perfect forecast or the operational infrastructure and ongoing running costs to continuously conduct trade adjustments. A treasurer is able to trade on risk-managed rate as part of their daily payments and receivables process, while Bank of America manages the risk and makes the required adjustments.
In this session, we describe the solution and the journey to get there.
