Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2023 07 13T041009Z 2 LYNXMPEJ6C03K RTROPTP 4 GLOBAL BANKS SVB | Business Express

Big companies toughen banking partner screening after crisis – survey

Big companies toughen banking partner screening after crisis – survey

By Laura Matthews

NEW YORK (Reuters) – Large companies are spreading out their counterparty risk and increasing screening of their banking partners in response to the recent banking crisis that has been a “wake-up call”, according to an industry survey to be released on Thursday.

Worried that possible future bank failures could leave them unable to trade or cause short-term liquidity crunches that could impact payroll and supplier invoices, 88% of companies are looking to increase their number of foreign exchange counterparties, according to the 2023 MillTechFX survey of 250 finance executives in North America.

Multinational companies and those with sales overseas use banks, or counterparties to the transactions, to trade foreign exchange and hedge currency risk.

“All of a sudden there’s a wake-up call,” said Eric Huttman, CEO at MillTechFX, the specialist currency arm of Millennium Global.

Huttman said his firm has added dozens of clients since the banking crisis and all of them have spent more time asking about its counterparty selection process.

“[They want] to make sure that we’ve done our homework and have an institutionalized policy in place, because ultimately, they are trusting us to do that,” said Huttman. “And that they can have multiple banks.”

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

The failure of several regional and mid-sized U.S. lenders earlier this year roiled global markets, sparking fears of contagion risks in the industry. In Europe, UBS acquired rival Credit Suisse after the Swiss government orchestrated a rescue plan.

Amol Dhargalkar, managing chairman at hedge advisory firm Chatham Financial, said events like these unveil new areas of focus for market participants, and that companies are creating more sophisticated ways to screen banks.

For instance, they are digging deeper into financial disclosures to better understand banks’ securities portfolios and whether there are any embedded losses of concern. Banks’ exposures to commercial real estate lending, their credit default swaps and how much interest rate risk they have are also data companies are requesting.

“The broad questions that companies are asking are, is my banking partner sound and will they be there when I need them,” said Dhargalkar.


(Reporting by Laura Matthews; Editing by Megan Davies and Muralikumar Anantharaman)


Recent Post: