From the Validus White Paper Series. About LIBOR cessation and how private capital investors are preparing for a new era of lending, borrowing, and interest rate risk management.
Coronavirus, with its impact on markets and business operations, presents an unprecedented challenge to investors managing FX exposure. Extreme market volatility has combined with operational challenges and counterparty risks to create a truly unprecedented situation.
The purpose of this document is to highlight the areas we feel are, or could be, the most impacted; we describe our experiences to date and our approach to five important issues:
✓ Operational risk ✓ Counterparty risk ✓ Credit Availability ✓ Counterparty Onboarding ✓ Hedging Costs
Validus participated in a special project launched by Sarona Asset Management in collaboration with EMPEA, Crystalus Inc., and USAID. The purpose was to develop currency risk management processes and tools in Emerging Markets to attract more private capital to those regions. Validus’ approach was selected as the most feasible and advanced to the ‘Pilot’ stage.