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Opinions and views from expert CFOZone members.

Tag >> Risk
Dec 01
2010

The opportunity in impact investing

Posted by annearf in socially reponsible investingRiskJP Morganimpact investingCash

annearf

One of the latest offshoots of socially responsible investing is called impact investing. It's aimed at creating investments with a social and/or environmental impact, as well as financial returns. To that end, it seeks to differentiate itself from traditional socially responsible investing, by focusing on enterprises that actively seek to do good, rather than those that merely avoid doing harm. That means businesses, for example, providing customers with access to water or housing or creating quality jobs. In a short time, it's attracted the interest of everyone from major financial institutions and pension funds to foundations, commercial banks, family offices, and wealth managers. The list includes such heavy-hitters as Citigroup, Deutsche Bank and Prudential Financial.

 But as I wrote recently, one of the big questions about impact investing is just what kind of returns you can get. Now a new report from JP Morgan, the Rockefeller Foundation, and the Global Impact Investing Network, provides at least some preliminary answers. The first large-scale data analysis of return expectations, it includes comparisons to established benchmarks for emerging and developed market debt and equity returns with data on over 1,100 investments. And it provides an estimate for potential returns and total investment opportunity over the next 10 years.

Nov 29
2010

What, me worry? Surge in new unsecured bonds

Posted by Stephen Taub in unsecured debtRiskjunk bondsdebt crisisdebtcovenantscorporate bondsCash

Stephen Taub

The European debt crisis is rocking the global stock markets, many debt markets as well as the Euro.

But one market that seems to be immune from the growing volatility is the market for riskier US corporate bonds.

Nov 24
2010

Caterpillar issues Yuan-denominated paper

Posted by Stephen Taub in yuan-denominated bondrisk managementRiskrenminbiHong KongdebtDealsChina

Stephen Taub

China is slowing making inroads into another major market--debt underwriting.

Caterpillar said its financial services subsidiary raised about $150 million in a yuan (also known as renminbi) denominated medium term note. The issuance was conducted in Hong Kong and bought by institutional investors.

Nov 24
2010

Which states are the most, least competitive?

Posted by annearf in Risknew economyknowledge workersinnovation

annearf

The key to economic competitiveness lies in fostering innovation. And to be well-positioned to drive innovation-based growth, US state economies need to be structured around such factors as attracting more engineers and immigrant knowledge workers.

What's more, some states are way ahead, while others are woefully behind.

Nov 22
2010

Surge in restatements, material weaknesses

Posted by Stephen Taub in Section 404Sarbanes-OxleyRiskrestatementsRegulationmaterial weaknessinternal controlsGlass LewiscomplianceAccounting

Stephen Taub

The number of financial reporting issues is on the rise this year, exceeding multi-year lows set last year.

In the first nine months of 2010, about 20 percent more companies filed restatements to correct accounting errors or reported internal-control weaknesses than in the first three quarters of 2009, according to a new study published by Glass Lewis.

Nov 19
2010

FX management could become more complex under Dodd-Frank

Posted by dbedell in Riskforeign exchange swapforeign exchange managementDodd-FrankCFTCCash

dbedell

Companies with international operations could see an impact when it comes to their foreign exchange management should legislation under Dodd-Frank go forward which would require that all standardized FX swaps be moved onto regulated exchanges, and additional legislation requiring the market to be jointly overseen by the CFTC as well as the Federal Reserve system.

Three large trade organizations are lobbying the US Treasury to exempt foreign exchange swaps and forwards from the new regulations—which will require many other OTC derivatives to be moved onto exchange trading systems.

Nov 17
2010

Gave thanks? Now go shopping

Posted by Stephen Taub in Riskretailholiday salesCash

Stephen Taub

'Tis the season to see holiday ads.

However, this year it seems like the battle for the gift dollars started earlier than usual..

Nov 17
2010

Warding off supply chain disruptions this holiday season

Posted by annearf in supply chainsuppliersRiskretailersenterprise risk management

annearf

Business disruptions from faulty supply chains are rampant, as my colleague Denise Bedell recently noted . Companies experience an average of five disruptions a year, according to a study from the Business Continuity Institute. 

In the retail sector, those problems are especially high, an average of 10 per year. And the holiday season only serves to highlight that situation , along with the need for companies to do something about it, according to Linda Conrad, director of strategic business risk and global relationship leader with Zurich Global Corporate, a division of Zurich Financial Services. 

Nov 11
2010

Serial corporate defaulters

Posted by Stephen Taub in Standard & Poor'sRiskdefault ratedefaultCash

Stephen Taub

What are the chances that a company that has defaulted on its debt defaults for a second time?

Not very high.

Nov 11
2010

What boards expect from their CFOs these days

Posted by annearf in risk managementRiskFM GlobalCFOcareerboard of directors

annearf

Attention finance executives: The relationship between CFOs and their boards is changing significantly from what it was a few years ago. And to be effective, you'd be wise to prepare yourself to address the questions and issues boards are focused on.

That's according to Jeff Burchill, CFO and senior vice president of FM Global, the Johnston, RI, insurance giant.  Burchill says that after the economy tanked in 2008, boards switched from a focus on top-line growth and winning market share to an emphasis on cost containment--whether to close facilities, for example, or which assets to dispose of--for obvious reasons. But now, the interest is swinging back to strategy and top-line growth. (Burchill plans to discuss these observations in more depth at the MIT Sloan CFO Forum in Boston later this month).

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