subject: What Is Financial Risk Management? You Should Know The Facts [print this page] he last couple of weeks have certainly been a historic time for the UK, by having the removal as presumed of the weary and discredited Labor Federal government that had been in power for 13 years, but more substantially the refering to power of the 1st coalition government in the UK since 1945 led by the Conservative leader David Cameron. In recognition of the City, there are some huge policy differences between the Conservatives and the LibDems but it's challenging to visualize that a Conservative led government may be bad for the Town.
Lots of write-ups have actually come out in the press on what makes a coalition federal government effective, and I am struck by the similarities of that with exactly what makes businesses effective. Top of the list is the individual chemistry between the different parties-- if that exists (assuming of course a requirement of competent folks and a viable business model) virtually anything else can easily be made to work. After the current board changes at Hazard, I truly feel we again have those components-- a board and management team that is not just competent yet which has enough personal chemistry to handle inevitable expert disagreements quickly and decisively. It is very encouraging that we have the ability to get to decisions and application of those decisions quickly.
A couple of weeks ago we announced a record order publication for the business, and while this even indicates a record amount of work to be done I might a lot rather have that complication than the opposite. A huge part of the cause is this year's regulatory wave around Liquidity reporting, yet commercially it is promoting that these waves look like being a routine attribute of life over the next couple years. The change of UK Federal government is extremely unlikely to slow that regulatory enhancement procedure down.
It finally looks as if the Greek debt crisis is addressed, a minimum of until the next one. Let's absolutely wish that exactly what has actually been done creates enough of a firewall for other EU nations. I still worry regarding the quantity of debt that European banks must refinance in the next 2 years. The fact that it is finally causing Credit Default Swap payouts is an alleviation-- it would have indeed been a travesty if that hadn't taken place. But to my mind it does invalidate a couple of the assumptions that CDS are an excellent hedge for debt, and there is enormous detail of the individual bond contracts that makes it rather hazardous to trade one against the other. I wager that Greek Law against English Law as a key rates component wasn't in most bond or CDS fair value rates systems. I expect that most intelligent bond venture capitalists will now begin to demand very a premium for bonds issued under the sovereign's very own law. We now have a dual sovereign bond market. On the one hand countries like the US, the UK and Japan which can constantly repay Treasuries or Gilts or JGB due to the fact that they are able to, if necessary, print the cash to repay their domestic currency bonds, and on the other hand nations like Greece that can easily not print their very own funds but which is able to issue bonds under their own law and will if needed modification the law to force compulsory redistribution of wide range from intercontinental investors to themselves. Roll on Chinese Yuan bonds under English law to keep sovereign debtors truthful!
We declared yesterday a set of board modifications created to enable the provider to expand to the following stage.
Constructing such a strong group and announcing it all at as soon as does take quite a bit of effort and organization, and I should say I have been expecting the long May Day week-end. We now have a board that will certainly work well together, an encouraging broker and other advisors, and a remarkably impressive commercial outlook. That is as much as any sort of CEO is able to ask for, and I'm delighted.
By having an incredibly sturdy COO/FD in Chris Langridge to help run the company, I am anticipating having the ability to spend even more time in the following few months with countless of our consumers describing and refining our approach for the following 2 years. It is a really impressive time for us in that we have within one business the ability to value complex instruments, we have the leading regulatory reporting customer base in the UK, and (we think) in Colline the greatest security management platform in the globe. Provided to that we now have 20 clients enrolled to our liquidity reporting and in some cases our LISA liquidity worry testing software program. These items have significant synergy; our collateral consumers ask us regarding liquidity reporting and about improvements to comply with regulatory timelines, our regulatory customers all require support by having new liquidity regulations-- and we have all these pieces under one roof covering. We are being kept remarkably busy and it's great that method!
