Importance

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Abstract

Embodiments of the invention are directed to systems and methods for managing financial market risk. The method can include defining an exposure map for the treasury budget, calculating and categorizing the financial market risk to the budget, and producing a financial market risk analysis report. The method can also include defining and implementing a hedge to mitigate financial market risks and costs. The hedge can be a basket hedge. The method can also include identifying the financial market risk factors impacting on each element of the budget, generating scenarios for market rates, and producing a report after hedging. Evaluating the financial market risk to the budget under stress scenarios can also be included. Defining the exposure map for the treasury budget can include defining exposures related to revenues and costs (gross profit), interest income, interest expense, hedge cash flow, inter-company cash flow, foreign exchange translation gain or loss, foreign exchange transaction gain/loss, earnings translation gain or loss, and/or commodity inventory gain/loss.

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First Claim