Amazon.com: Financial Risk and the Corporate Treasury: New Developments in Strategy and Control: Robert Jameson: Books

Editorial Reviews

Jeremy Wagener - The Association of Corporate Treasurers
As the preface to this book by Risk Publications and Deloitte & Touche says, we already read quite enough about the latest derivative products but too little about strategic risk management and the uses to which derivatives can be put. The book's aim is to fill the gap. How well does it succeed? Its structure sometimes works against it: each of the 11 chapters is by a different author(s) with some inevitable overlaps, for example, in chapters three and four on value-at-risk. And, without wishing to sound at all xenophobic, the book is written from a US perspective; nearly all the references and examples are US in origin - for example, the accounting and disclosure aspects refer only to FASB requirements. I would also have liked more contributions from practising treasurers and rather fewer from consultants and bankers, thoughtful and stimulating as many of these are. These are the defects in an otherwise useful and timely publication, ambitious in its scope. The first chapter, by three authors from the Federal Reserve System, is an overview of the state of academic research on corporate risk management. Some of the evidence is thin and therefore conclusions about corporate hedging activity - the reasons for it and the results - are difficult to reach. The book discusses the familiar issue of whether it is the firm or the investor who should be doing the hedging (it is ironic that the authors' difficulty in finding hard data in annual reports on corporate hedging activity is the same problem investors have when trying to make rational investment decisions). Better accounting and disclosure of financial instruments on both sides of the Atlantic, which is discussed in two of the chapters, is long overdue. There is a good description in chapter two of the types of risk to a corporate's cashflow, including the critical - but often overlooked - economic risk. The next chapter includes the basic building blocks for a sound treasury policy and procedures manual and also has some interesting ideas about benchmarking and matching the risk structures of the firm's liabilities to its assets. Whether or not VAR is suitable for the non-financial firm is given a good airing in two of the book's chapters. Even if it is, it is useful only for tradeable risks where the impact of market movements can be expressed in one figure, taking account of correlations between rates or prices. The book makes good use of panels throughout for key concepts and themes, for example, on corporate versus banking VAR. It is encouraging to see chapters on commodity and pension asset risks, two areas in which treasurers are increasingly involved. And, to give the book an up-to-the-minute look, there is also something on credit derivatives. It was amusing to find, however, that neither the glossary of definitions nor the index listed the D-word!

Book Description
*Practical approach to risk management for the corporate treasurer *Examines a range of risks including interest rate, commodity and pension fund asset allocation *Key methodologies in corporate risk management, such as value-at-risk (VAR)