Tools to Identify and Mitigate Risks

Risk management in corporate treasury is more important than ever in the Covid-19 crisis context. Even though the first wave of recovery is in sight, the development of the economy is highly uncertain. Along with the risk of a new infection wave, companies are impacted on more levels than before.

That’s why it is important to define risk areas and use scenarios to check what effects the current situation could have on the company. Depending on the intensity of the effects, the list of measures must be adjusted from scenario to scenario.

On behalf of the European Association of Corporate Treasurers (EACT), The Verband Deutscher Treasurer e.V. Risk Management-group prepared a report that specifies a risk matrix centered around potential sources of risk: Operational Risk, Liquidity Risk, Credit Risk, FX Exposure Risk, and Interest Rate Risk.

The matrix lists the risks listed above, explains what each involves and offers a checklist for each. Details…