FX Risk Management

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FX RISK MANAGEMENT

Our aim at Klarity FX is to build a framework to better manage your risk. One that's dictated by your needs, enabling your fx strategy to be aligned with your business goals.

Our analysts provide resources of implementing a well thought-out, and tested approach, helping you zero-in on problem areas and avoid decision paralysis

As an intermediary, we are cognizant of the role your existing bank or broker. Our experience in dealing with a number of such companies enables us to work independently or directly with your fx execution partner, benchmarking their performance and helping you attain the best out of all of your fx relationships.

Risk Identification

An analysis of cash flow forecasts...

Risk Measurement

Potential impacts of your company's FX risk...

Risk Management and Objectives

To develop a currency risk management strategy...

Risk Management Process

Our approach will ensure compliance with your broader Treasury guidelines...

Strategy Execution

Once a strategy has been determined...

Benchmarking & Analysis

Klarity provides ongoing reporting to measure the performance...

1. Risk Identification

An analysis of cash flow forecasts and historical data will be performed in order to determine the size of the true foreign exchange risk.

2. Risk Measurement

Potential impacts of your company's FX risk can be reviewed and quantified using specific modeling techniques. The analysis will clearly demonstrate the impact of FX risk on your entity's cash flow and or profitability.

3. Risk Management and Objectives

To develop a currency risk management strategy the client must clearly specify the risk management objective(s) that will guide any hedging / trading decisions. We will then consider a number of alternative strategies to achieve these objectives. These strategies are "back tested" using regression/historical analysis to ensure that the risk management objectives are met and remain consistent with any guidelines provided by you the client.

4. Risk Management Process

Our approach will ensure compliance with your broader Treasury guidelines, including budget constraints or accounting limitations. Inclusive of any accounting issues, we assist you in achieving your core risk management objectives, while ensuring that the program remains compliant within the broader management framework. In determining the approaches and strategy, Klarity will offer guidance on industry best practices and recommendations that would be applicable for hedge accounting treatment wherever possible.

5. Strategy Execution

Once a strategy has been determined, we assist in its implemention. On an ongoing basis Klarity will provide capital market information to help determine appropriate execution and FX instrument selection. We assist in comparing, negotiating FX pricing and designing tailored structured products as required.

6. Benchmarking & Analysis

Klarity provides ongoing reporting to measure the performance of the FX program, ensuring that the objectives of the currency risk management approach are being met. Regular feedback is used to positively iterate the process and allow for adequate flexibility to market conditions.

Klarity FX, Inc.
220 Sansome Street
Suite 980
San Francisco, CA 94104

+1 415-678-2888
info@klarityfx.com