Managing Foreign Exchange Risk: How to Identify and Manage Currency Exposure (Risk Management) [Paperback]

Dominic Bennett (Author)

Book Description

ISBN-10: 0273619764 | ISBN-13: 978-0273619765 | Publication Date: May 25, 1997

The definitive, practical guide to sound currency risk management.

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About the Author

Dominic Bennett is a member of KPMG Management Consulting's treasury consultancy group. He has specialized in treasury management since joining the Ford of Europe treasury in 1977 and has worked in the treasury departments of Reed International, the Griffin Group and Trafalgar House. Since joining KPMG in 1988, he has advised a large number of corporate and public sector clients on a range of treasury issues. Mr Bennett is a member of the Association of Corporate Treasurers and a frequent writer and lecturer on treasury issues.

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Introduction

This is not a book for speculators. It is intended primarily to help those who, as a result of their commercial activities, have to manage foreign currency risk; although I hope students will also find it useful. The emphasis of the book therefore is not on making profit from foreign exchange dealing but on practical issues involved in managing currency risk.

Having been involved with corporate treasury management for nearly 20 years in a variety of organizations and roles, I am conscious that it is a discipline that is subject to constant change through, for example, the development of new hedging instruments, changes to the tax and accounting treatment of hedging transactions, and government policies. In the time that I have been actively involved in currency management I have seen the introduction of currency options and associated derivatives, the abolition of exchange controls over Sterling, Sterling's membership of the Exchange Rate Mechanism of the European Monetary System and suspension from it, and changes to the accounting treatment of hedging transactions. In addition, we have seen, and continue to see, fundamental changes in business and treasury activity around the world as new markets open up and international banking systems develop to service them. At the time of writing, the debate about the Single European Currency continues and, if anything, is likely to intensify as the dates set at Maastricht for the stages in the process draw nearer. My experience has chiefly been gained in the UK; other countries will have had similar issues and events which have affected both the ability to manage currency exposure and the implications to be considered in doing so.

In view of this constant change and my desire to make this book as widely applicable as possible, I have deliberately not covered the accounting, taxation and regulatory aspects of currency management as these are matters which vary from country to country and can change rapidly. Instead, I have focused on what I believe are the unchanging and widely applicable fundamentals of exposure identification and management. In particular, I wanted to make this book useful for smaller companies that do not have the resources to run a sophisticated treasury function but still need to manage currency exposure efficiently.

I know from my experience of talking to, and advising, such companies that there is a desire to understand not just about hedging instruments but about the wider and more fundamental issues relating to currency exposure management. I have tried to discuss these issues in layman's terms, avoiding mathematical formulae and explaining the jargon where it is necessary to use it.

In order to help those who are coming to foreign exchange management for the first time, I have assumed that the reader has no previous understanding or expertise in the subject. I beg the forbearance of those with more experience who may find that the earlier chapters confirm what they already know rather than shed new light, but I believe that it is essential to have a clear understanding of the nature of currency exposure and how to identify it before reaching for a hedging instrument. I hope, however, that all readers, whatever their level of knowledge will find something of value in this book.

In writing this book I am greatly indebted to Valerie Hawkes, a treasury practitioner and consultant of wide experience, who read through the manuscript and made many helpful comments and suggestions. Any errors or omissions that remain in this book (and I hope there are none) are, however, mine alone.Dominic Bennett,
November 1996

Product Details

• Paperback: 280 pages
• Publisher: Financial Times/Prentice Hall (May 25, 1997)
• Language: English
• ISBN-10: 0273619764
• ISBN-13: 978-0273619765
• Product Dimensions: 9.6 x 6.8 x 0.8 inches
• Shipping Weight: 1 pounds
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #3,375,545 in Books (See Top 100 in Books)

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