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Managing Balance Sheet Risk

 

 

 

 

 

 

 

 

 

Our market professionals execute hundreds of risk management transactions annually in the derivatives markets.

Prudent asset and liability management ensures that the currency, interest rate, and risk characteristics of a balance sheet are within prescribed risk parameters.

Treasury staff consulting in this area have hands-on experience managing IBRD’s US$100+ billion debt portfolio to ensure consistency with the institution’s financial and risk management policies. Our expert advice, innovative solutions, and outstanding execution services are backed by our market insight, global coverage, and experience of managing financial risks on the World Bank’s balance sheet.

Tailored advisory engagements to meet the specific needs and timing of the client

An advisory engagement usually begins with an assessment of the initial situation, which includes an evaluation of capacity and institutional issues that can affect implementation, and reform recommendations. These initial assessments may set the stage for more tailored engagements in various facets of developing and implementing a risk management strategy. Our consultancy focus areas include:

  • Analyzing the existing risk management framework and identifying relevant market risks
  • Methods of quantifying risks to the balance sheet and technical support to design a framework and governance process for selecting hedging strategies
  • Structuring and executing transactions with the market
  • Building a robust infrastructure for hedging risk with a sound legal framework, appropriate credit risk management, adequate systems for booking, accounting, valuation, as well as oversight capabilities required for proper risk monitoring and management
Complementary Services Market specialists provide ongoing support to ensure that appropriate systems, controls and reporting mechanisms for measuring and monitoring residual risks are in place, as well as targeted training to transfer knowledge.