COVID-19 Corporate Financing Facility and Hedging: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Add abbreviation.)
 
imported>Doug Williamson
m (Remove surplus links.)
 
Line 1: Line 1:
''Business continuity - pandemic - UK.''
1.


(CCFF).
Traditionally hedging refers to the process whereby a firm uses financial instruments (such as forward contracts, futures contracts or options) or other techniques to reduce the impact of fluctuations in such factors as the market price of credit, foreign exchange rates, or commodity prices on its profits or corporate value.


Under the COVID-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.
Other techniques may operational or structural responses, for example re-locating manufacturing or assembly to align the currencies of costs with revenues.


This will support companies affected by a short-term funding squeeze, and allow them to finance their short-term liabilities.
Following such successful structuring, the organisation may then be said to be 'naturally' hedged.


It will also support corporate finance markets overall and ease the supply of credit to all firms.


2.


All UK businesses are eligible.
The application of hedging  techniques has been extended to the management of many other risks including, for example, inflation and longevity risk arising in pension funds.




The scheme will be available early in the week beginning 23 March 2020.
== See also ==
* [[Arbitrage]]
* [[Authorisation]]
* [[Covering]]
* [[Deal contingent forward]]
* [[Delta hedging]]
* [[Effective]]
* [[Foreign exchange forward contract]]
* [[Futures]]
* [[Guide to risk management]]
* [[Hedge accounting]]
* [[Hedge fund]]
* [[Interest rate guarantee]]
* [[Macro hedging]]
* [[Option]]
* [[Outturn]]
* [[Overhedging]]
* [[Pre-hedging]]
* [[Pre-settlement risk]]
* [[Reduce]]
* [[Risk response]]
* [[Speculation]]
* [[Transfer]]
* [[Uncovered]]
* [[Underhedging]]
* [[Warehousing]]




==See also==
===Treasurer articles===
*[[Bank of England]]
*[[British Business Bank]]
*[[Business continuity plan]]
*[[Contingency plan]]
*[[COPD]]
*[[Coronavirus]]
*[[Coronavirus Business Interruption Loan Scheme]]
*[[Coronavirus Job Retention Scheme]]
*[[COVID-19]]
*[[Disaster recovery planning]]
*[[Financial stability]]
*[[Her Majesty’s Revenue & Customs]]
*[[Liquidity management]]
*[[WFH]]


*[[Media:2015_05_May_-_The_devil_is_in_the_detail.pdf| The devil is in the detail, 2015]]


==Resources for COVID-19==
*[http://www.treasurers.org/node/8925 Harness your hedges, April 2013]
[https://www.treasurers.org/hub/technical/covid19 ACT technical - COVID-19]


[https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses UK government: support for businesses]
*[http://www.treasurers.org/node/689 Interest rate hedging: demand the proof, 2008]


[https://www.gov.uk/coronavirus UK government: COVID-19 support hub]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_frameworks]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 09:53, 4 August 2018

1.

Traditionally hedging refers to the process whereby a firm uses financial instruments (such as forward contracts, futures contracts or options) or other techniques to reduce the impact of fluctuations in such factors as the market price of credit, foreign exchange rates, or commodity prices on its profits or corporate value.

Other techniques may operational or structural responses, for example re-locating manufacturing or assembly to align the currencies of costs with revenues.

Following such successful structuring, the organisation may then be said to be 'naturally' hedged.


2.

The application of hedging techniques has been extended to the management of many other risks including, for example, inflation and longevity risk arising in pension funds.


See also


Treasurer articles

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=COVID-19_Corporate_Financing_Facility&oldid=24684’