The Federal Reserve’s decision to cut interest rates by 50 basis points, its first reduction in four years, has far-reaching consequences for the broader economy and corporate treasury management. While the immediate effects are visible regarding lower borrowing costs, the long-term implications, such as inflationary pressures, shifts in market dynamics, and financial instability, can significantly […]
Europe is going through economic stagnation, with growth expected to reach only 0.8% in 2024, according to Shaan Raithatha, Vanguard Senior Economist. Challenges, including high interest rates and ongoing geopolitical tensions, make it even worse for this sluggish economic performance. The European Central Bank (ECB) has maintained high interest rates to combat persistent inflation from […]
Markets are inherently unpredictable, often catching even the most seasoned investors off guard. Monday’s free-fall on Wall Street saw the worst single-day losses for the S&P and Dow since September 2022. This came on the heels of a disappointing labor report and Japan’s unexpected interest rate hike, sparking further fears of global recession. Markets staged […]
Strategic Treasurer, in partnership with GTreasury, has released the 2023 Treasury Technology Analyst Report. The 2023 Treasury Technology Analyst Report serves as a definitive guide for thoughtful financial stewardship in the digital age, aiding practitioners in exploring how treasury technology meets treasury needs. The report delves into technology trends for this year and beyond, current market […]
GTreasury was recently named as a Leader in two new reports, the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Enterprise Treasury and Risk Management Applications 2023 Vendor Assessment, as well as the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Midmarket Treasury and Risk Management Applications 2023 Vendor Assessment. In these latest reports, GTreasury was recognized for its […]
How do you choose a TRMS that will deliver the tools and connections you need? Look before you leap: it’s a universally agreed upon adage in many circles, but it’s particularly relevant to the world of treasury and risk management. Treasurers need accurate and immediate information to effectively manage risk and seize strategic opportunities, whether […]
A popular Chinese proverb says “the best time to plant a tree was 20 years ago. The second-best time is now.” This is equally true in the world of hedging.
With the transition from LIBOR in full swing, the time to act is now. New transactions starting in January 2022 will not be based on LIBOR. Some financial institutions are using SOFR, but there are other reference rates being used, causing market confusion and changing risk profiles.
On Friday, the CME announced they will start publishing Term SOFR Rates for 1-month, 3-month and 6-month tenors.
Friday, March 5, 2021, the official groundwork was laid to discontinue LIBOR by the FCA, IBA and ISDA.
In unexpected news today, the end of USD LIBOR has been extended to June 30, 2023.
Late last week, the Financial Accounting Standards Board (FASB) issued an exposure draft expanding the scope of Topic 848 to include derivatives that are discounted, but not reset, using rates subject to reference rate reform (RRR). The proposed amendments target contracts with calculations (other than resets) referencing IBOR rates, e.g. margining, discounting or price alignment.
The eagerly anticipated ISDA IBOR Fallback Protocol was released on Friday, October 23, 2020. The effective date of the protocol has been set for January 25, 2021.
We always encourage hedgers to consider the economics of a transaction before looking at the accounting. If the economics don’t make sense, it doesn’t matter how favorable the accounting treatment is, it probably isn’t a good idea!
The direct impacts of the transition away from LIBOR to the use of an alternative reference rate such as the Secured Overnight Financing Rate (SOFR) have been well publicized. ISDA and ARRC have been releasing regular updates and suggested fallback language to determine how LIBOR rates will be replaced in derivative and loan agreements, once LIBOR is no longer available.