Pandemic risks eclipse treasury priorities as businesses diversify investments to mitigate impact, EIU and Deutsche Bank survey finds

The Covid-19 pandemic has shunted aside existing challenges to sit atop treasurers’ priority lists, according to “The resilient treasury: Optimising strategy in the face of covid-19”, a survey run by the Economist Intelligence Unit (EIU) and sponsored by Deutsche Bank.

The results show that treasurers are looking to diversify their investments in a bid to mitigate the pandemic impacts, including heightened liquidity, foreign-exchange and interest-rate risk. As many as 55% plan to increase investments in long-term instruments, with 48% increasing investments in bank deposits, another 48% in local investment products, and 47% in money-market funds.

“The Covid-19 pandemic has drastically altered business plans in 2020. It has placed a certain level of strain on treasury processes, but the challenge it presents has been managed by traditional treasury skills. It is clear that pandemic risk will be on the treasury checklist for years to come, but it is one of many risks the department faces and will continue to manage,” says Melanie Noronha, the EIU editor of the report.

The news was covered by: TMI, Treasury Today, CTMfile, Business Money, Trade Finance Global.

ICC’s Secretary General John Denton discusses the impact of COVID-19 on the tourism sector on Bloomberg Daybreak Europe

Speaking to Bloomberg Radio’s Caroline Hepker and Roger Hearing, John Denton – Secretary General of the International Chamber of Commerce (ICC) – discusses the impact of COVID-19 on the travel and tourism industries, particularly as fears of a second wave of the virus and tighter lockdown restrictions are threatening business continuity.

Denton explains that the travel industry has lost more than 120 million jobs around the world in this current crisis, with women making up more than half of those made unemployed and young people a third. He also elaborates on the need for teamwork among economies and globally consistent safety standards for passengers to revive the industry.

To listen to the full interview, please click here.

In Bolivia’s El Diario, BNY Mellon’s Tom Meiman and Sam Schwartzman explore the volatile US liquidity landscape and the tools to optimise cash

Following the COVID-19 pandemic, the US liquidity landscape is changing. With low-interest rates already dominating the US because of the 2008 financial crisis, treasurers face greater challenges as they navigate today’s volatile market conditions.

Against this backdrop, Tom Meiman, Product Line Manager for Liquidity Balances and Demand Deposit Account Services, BNY Mellon Treasury Services, and Sam Schwartzman, Head of the IMG Cash Solutions Group, BNY Mellon Markets explore how cash managers can use investment and deposit accounts to effectively optimise their surplus operating cash.

 Click here to read Part One and Part Two (the articles have been published in Spanish).

BNY Mellon’s Carl Slabicki speaks to Payments Journal on the evolution of payments in the US

As new real-time payment options emerge and legacy systems are modernised, the payments industry is experiencing a shift from paper to digital processes. This trend is being reinforced by the current challenging environment, which is forcing businesses to rely on the digital environment more than ever.

Against this backdrop, in an article for Payments Journal, Carl Slabicki, Head of Strategic Payment Solutions at BNY Mellon explains that it is critical that banks keep pace with the rate of change – supporting clients as they undertake their own digital journeys.

Read the full article here

Loss given default in a downturn: How can we learn from historical data, asks GCD’s Richard Crecel in International Banker article

Writing for International Banker, Richard Crecel, Executive Director at Global Credit Data, explains that while there are many uncertainties about the duration and impact of the pandemic, observers remain cautious in their recovery estimates. Taking into consideration the current macroeconomic forecasts, it is likely we are heading towards a downturn period.

In turn, banks worldwide posted record-high provisions to prepare for significant rises in the number of nonperforming loans in their portfolios, likely resulting in higher credit losses. They will also need to accommodate for this downturn in their risk models, factoring in the influence on default rates and loss given default (LGD) levels.

To read the full article, please click here. The article is also available in the Summer 2020 print edition of International Banker.

How can banks successfully navigate the US liquidity landscape? BNY Mellon’s Tom Meiman and Sam Schwartzman explore in an article for Global Banking & Finance Review

Over the past 10 years, the US liquidity landscape has faced near zero interest rates. In this unique time of disruption, businesses face further challenges when it comes to navigating the volatile landscape – including the possibility of moving towards a negative rate.

In view of these challenges, Tom Meiman, Product Line Manager for Liquidity Balances and Demand Deposit Account Services, BNY Mellon Treasury Services, and Sam Schwartzman, Head of the IMG Cash Solutions Group, BNY Mellon Markets outlines the importance of optimising excess operating cash.

Read the full story here.

How can banks successfully navigate the US liquidity landscape? BNY Mellon’s Tom Meiman and Sam Schwartzman explore in an article for Global Banking & Finance Review

Over the past 10 years, the US liquidity landscape has faced near zero interest rates. In this unique time of disruption, businesses face further challenges when it comes to navigating the volatile landscape – including the possibility of moving towards a negative rate.

In view of these challenges, Tom Meiman, Product Line Manager for Liquidity Balances and Demand Deposit Account Services, BNY Mellon Treasury Services, and Sam Schwartzman, Head of the IMG Cash Solutions Group, BNY Mellon Markets outlines the importance of optimising excess operating cash.

Read the full story here.

In an article for Bobsguide, BNY Mellon’s Carl Slabicki explores the path to digital payments in the US

The US payments landscape is in the midst of significant change. A spark of new capabilities – including developments to existing payment rails, the dawn of real-time payments and the emergence of innovative overlay services – is transforming the entire payments ecosystem. What’s more, with the current challenging environment causing unprecedented disruption to manual processes, the value of moving away from paper-based payments towards faster, more streamlined digital alternatives has never been more apparent. With the stage set for the transition to digital, banks are being presented with the opportunity to revolutionise both payables and receivables for their clients.

As clients increasingly look to venture into the world of digital – leveraging tools including APIs, real-time payment capabilities and pre-validation technologies, Carl Slabicki, Head of Strategic Payment Solutions at BNY Mellon explores how banks must ensure that they can support the full breadth of client requirements.

Read the full article here

S&P’s Karl Nietvelt evaluates infrastructure’s resilience in the face of COVID-19 in GLIO

Writing for the Global Listed Infrastructure Organisation’s Journal (GLIO), Karl Nietvelt, Global Head of Analytical Excellence & Research, Global Infrastructure, at S&P Global Ratings, looks at how the COVID-19 pandemic has affected the infrastructure asset class.

While infrastructure is known to be largely resilient to shocks, it is by no means immune. Certainly, as a result of the pandemic, credit quality within the sector has been tested to a greater extent than during the global financial crisis, with transportation infrastructure assets coming under considerable strain. Indeed, the sector has seen close to 10% of ratings downgraded in recent months, as volume decreases on an unprecedented scale and prospects for recovery remain uncertain.

The full article can be found here.

 

 

Natixis’ Eric Arnould speak to Bloomberg on convertible bonds gaining tractions among issuers

Speaking to Bloomberg, Eric Arnould, Global Head of Equity Capital Markets at Natixis, comments on Europe’s largest fundraising deals coming from bonds that can convert into equity and investors betting that the underlying stock will jump 50% or more in the next few years.

“Exposure to equity, coupled with volatile equity indexes and stabilization of credit spreads, is likely to spur even more convertible bond issuance in the second half of the year”, explains Arnould.

To read more, please click here.