Attitude toward risk management
In an effort to take the pulse of the market about the overall concern toward
international exposures, the 2011 survey asked companies to rate whether in
the last twelve months their attitude toward foreign exchange risk management
was a reduced concern, unchanged, or of greater concern. A majority, 61%, stated
their attitude was unchanged. A decided minority, 4%, replied that their concern
had actually become reduced. But more than a third — 36% — stated that foreign
exchange risk management had become a greater concern.
We asked those expressing a greater concern to characterize how they have
changed their behavior. Most (52%) stated that they had increased the amount
of their exposure being hedged. The next most often cited responses were to
develop or revise an FX policy (37%) and to extend the average maturity of
their hedges (25%). A smaller percentage of companies (10%) responded by
decreasing the amount of exposures hedged and 5% stated that they shortened
the average maturity of their hedges. Overall, these results suggest that
FX risk management continues to evolve at many companies, an outcome
consistent with increased international opportunities as the global economy
recovers from recession and a flat world heightens competitive pressures.
Attitude toward risk managementIn an effort to take the pulse of the market about the overall concern towardinternational exposures, the 2011 survey asked companies to rate whether inthe last twelve months their attitude toward foreign exchange risk managementwas a reduced concern, unchanged, or of greater concern. A majority, 61%, statedtheir attitude was unchanged. A decided minority, 4%, replied that their concernhad actually become reduced. But more than a third — 36% — stated that foreignexchange risk management had become a greater concern.We asked those expressing a greater concern to characterize how they havechanged their behavior. Most (52%) stated that they had increased the amountof their exposure being hedged. The next most often cited responses were todevelop or revise an FX policy (37%) and to extend the average maturity oftheir hedges (25%). A smaller percentage of companies (10%) responded bydecreasing the amount of exposures hedged and 5% stated that they shortenedthe average maturity of their hedges. Overall, these results suggest thatFX risk management continues to evolve at many companies, an outcomeconsistent with increased international opportunities as the global economyrecovers from recession and a flat world heightens competitive pressures.
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