BNP Paribas has appointed a former Nomura and Deutsche Bank veteran to head FX banks sales in North America, the French bank confirms.

The eurozone debt crisis is going to escalate once the US elections are out of the way, argues leading Russian investment bank VTB.

A coalition of financial-products industry associations, including a leading FX market group, are developing a handbook to help companies operating in traded markets comply with a collection of complex new EU regulations, says Futures and Options Association (FOA) CEO Anthony Belchambers.

Published in conjunction with: J.P. Morgan • RBS • SEB • Standard Chartered Bank

One of the world’s largest global electronics companies wanted to consolidate its Asia Pacific liquidity position for multiple currencies from multiple entities and countries into its regional treasury centre in Singapore on a daily basis. The company’s goals were to ensure regional visibility of daily liquidity, fund regional daily payment needs and build on its existing structure with minimum disruption to daily business. The use of multiple currencies and multiple accounts for multiple entities – with many different banks – made a solution challenging. Bank of America Merrill Lynch worked with the electronics company to leverage its existing liquidity management structures and layer a multi-currency notional pool on top of the existing structures. This solution combined a hybrid of domestic sweeps, a single currency notional pool, cross-border sweeps and a multi-currency notional pool.

Having centralized liquidity, the next priority for treasurers is to quantify how much liquidity the company actually needs, and how to minimize the costs and risks associated with managing it. By Robert Pehrson, global head of product management (corporate segment), and Patrik Bergström, financial strategy, client relationship management, SEB Merchant Banking.

A global retailer wanted to take a modular approach to building its liquidity management solution. The company already operated a treasury and shared service centre (SSC) in China and wanted to concentrate all of its Asian liquidity in Hong Kong. An important requirement for the company was that at periodic intervals group liquidity would need to be concentrated back to its home country. The solution devised by Standard Chartered uses in-country sweeping for local currency and US dollar accounts with all the funds concentrated into a single account for each currency. A regional cash pool in Hong Kong uses a target balance sweeping structure to ensure that all participating accounts have sufficient operating balances. The cash pool header account in Hong Kong is included in an interest optimization solution with in-country header accounts in restricted countries that cannot sweep cross-border. Standard Chartered supports the company’s SSC in China and Hong Kong using its Straight2Bank FX Payments solution which supports 130 currencies. The company’s FX hedging needs are served through a dedicated foreign exchange trading desk located in Hong Kong.

With storm clouds darkening over the eurozone, the extreme volatility of market and economic conditions has been a concern for corporate treasury teams worldwide, especially for those that operate in Europe. Specifically, fears have mounted regarding the potential for assets to be effectively frozen should problems in a country in the eurozone deepen. Diageo’s treasury team wanted to plan to reduce the impact of such a scenario. Its treasury function operates as an in-house corporate bank and all cash is concentrated in London. To minimise its exposure, the company wanted to find a reliable and risk-managed solution to enable consolidation of cash flows, while establishing centralised control in London. Diageo’s solution was to partner with Bank of America Merrill Lynch to work through the impact of different scenarios on its cash management structures to enable it to put in place the right contingency planning to make sure it could minimise potential disruption.

Faced with an unusually broad and persistent range of challenges, treasurers are looking for sustainable solutions.

Corporate treasurers and their bank counterparts are starting to employ similar strategies in dealing with liquidity risk. Both have learned valuable lessons over the past few years, and now it’s time to put them to good use. by Martijn Stoker, Director, Global Head Liquidity Management, Transaction Banking, at Standard Chartered Bank.

Sterling looks set to rally this week as the UK hedges payments to British farmers as part of the European Union’s Common Agricultural Policy.

Speculators on the CME sent the USD further into short territory last week after the Federal Reserve’s QE3 announcement, as traders show increasing hesitancy to be long currencies in countries where central banks are buying assets.

EBS, Icap’s electronic FX trading platform, has taken on a former head of FX prime brokerage in New York.

London-based LCH.Clearnet is poised to become the backstop of choice when the FX market has to meet EU and US mandates for shuffling non-deliverable forward (NDF) trades through central counterparty clearing (CCP) houses.

Deutsche Bank has hired an FX salesperson in London from Bank of America Merrill Lynch (BAML).

A veteran spot trader from Bank of America Merrill Lynch (BAML) has left the firm and is believed to have been hired by ANZ in London, according to people familiar with the situation.

> Navigating the new risk landscape

One week on from the Federal Reserve’s announcement of QE3, the mood in the markets could be described as reflective, or even a bit hung over, after the punchbowl of global liquidity was refilled.

UBS, the leading FX bank in western Europe, has made two new hires for its southern European institutional FX sales team, a bank spokesperson confirms.

The escalation in tensions between China and Japan could lift the yen to record levels against the dollar and prevent Tokyo from intervening in the FX market.

The collapse of Knight Capital’s electronic trading systems in August caused a large upswing in demand from FX dealers in Asia for computer network security-monitoring hardware, says Donal O’Sullivan, Corvil head of product management.

The head of EBS Prime has left the firm after nine-years, according to people familiar with the situation.

EM investors are as bullish as they have ever been, after the Federal Reserve’s decision to introduce QE3 and the European Central Bank’s move to ease the eurozone debt crisis, according to a survey from Société Générale.

The renewed expansion in the Federal Reserve’s balance sheet after the announcement of QE3 will re-establish the cyclical downtrend in the USD that started in early 2009, according to BCA Research, the independent provider of global investment research.

EM reserve managers are starting to accumulate funds on a scale not seen for more than a year – a development that is likely to keep FX volatility down at its current low level and encourage investors into carry trades.

If the Bank of Japan (BoJ) wants to weaken its currency, it should not miss the opportunity to ride the current wave of central bank activity to undermine its currency.

Hotspot FX, the multi-dealer platform owned by Knight Capital Group, saw its volumes plunge by 19.2% in August, after its parent company, Knight Capital, came to near collapse after a computer glitch caused losses of $440 million.

An HSBC FX options trader based in London and another based in Hong Kong have left the bank.

Speculators on the CME continued to push USD positions into short territory ahead of the Federal Reserve’s QE3 announcement last week, cutting short EUR positions further while adding to long positions in emerging market (EM) and commodities currencies.

Fall in use by domestic and foreign traders; Poor economic figures hold it back