• Home
  • About
  • Subscribe
  • Conference
  • Events Calendar
  • Webcast151
  • MOTB
  • Log In
  • Register

Room 151

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews

CIPFA’s risk study registration: Losing interest in treasury management?

0
  • by Jackie Shute
  • in Jackie Shute · Treasury
  • — 22 Sep, 2016

The following communication is written by Jackie Shute of PS Live. Jackie will be analysing the results of CIPFA’s treasury management risk survey here on Room151. 

Losing interest in treasury management?

Then let CIPFA’s Treasury Management Risk Study help rectify that!  Yes, CIPFA’s FREE OF CHARGE Risk Study is returning on 30th September giving your authority the opportunity to access an objective analysis of your treasury position to provide that key tool in your financial planning process.

If you can answer yes to any of the following questions, then this risk study is perfect for you:

  • Would you like to know the affordability of your capital spending plans over the medium and long term?
  • Do you want to find out the likelihood of meeting your net interest budget over the medium term?
  • Are you interested in finding out how much of your net revenue budget is at risk from unfavourable movements in interest rates?
  • Would you like to know whether your level of external borrowing in both the General Fund and HRA is on benchmark, and what this means for risk within the respective revenue accounts?
  • Would you like more clarity on whether the credit risk/return position of your authority compares favourably to that of your peers?
  • Is it worth allocating a small amount of resource to complete the data request in order to better inform you about your treasury risk position?

You don’t need me to tell you that the return you may now be looking at on your investment portfolio may not be quite that which was budgeted for back in February, so why not take advantage of the ability to inform this coming budget cycle with the downside possibilities in mind.  If you don’t know the risks, you can’t attempt to mitigate them.  The risk study can highlight exposures, and provide the framework for any uncomfortable positions to be managed.

Many authorities are now suffering the after-effects of past long term decisions regarding portfolio structures, which were made without the benefit of tools and a framework within which to project the underlying need for the duration of the deals being made.  This has impacted heavily on the carry cost burden being suffered by many authorities, which could have been reduced if different decisions had been made.  It is therefore essential that authorities take advantage of opportunities to utilise these tools in order to manage the evolving position on a forward looking basis, to improve resilience and reduce risk.

The risk study will provide that pivotal role of linking the capital spending plans to the treasury strategy to provide the revenue implications on an expected and risk based approach.  The modelling will apply the Best Practice concepts of the CIPFA Treasury Risk Management Toolkit to enable the liability benchmark to be determined, which will consequently drive the projected loan and investment portfolio balances.  These balance sheet projections, driven by the authority’s spending plans, will form the key building blocks upon which strategic decisions can be made.

The analysis then applies live market data to those positions, and the impact of any future anticipated borrowing and investments is combined with the current portfolio trades to produce the expected interest impact.  New trades at future unknown rates of interest create uncertainty and risk to this expectation, as does the impact of any variable rate trades.  This uncertainty is captured within the analysis which applies thousands of alternative interest rate scenarios to the positions, allowing you to see not just the possible upside potential if rates move favourably, but also the downside possibilities which can be managed away with appropriate strategies, that can be identified from the analysis.

The risk study has attracted over 200 participants in previous years, and this year CIPFA hope to make it bigger and better than before.  In addition to the professional risk study providing the full strategic analysis outlined above, there is a ‘lite’ participation option for those authorities who may not wish to obtain that strategic view, and will provide a sub-set of the full results.

The lite version provides your credit risk / return positioning relative to the universe measured objectively using live market data.  It will dig into investment duration and investment returns as well as borrowing profiles and rates.  These results, and many more, will be available to participants immediately following submission of the portfolio data.

The participation window will be open from 30th September until 14th October, and registration for the Study is open now on this link CIPFA Risk Study Registration

So let CIPFA help you avoid losing interest in treasury management, engage in the Risk Study and use the framework and results to bring resilience to your financial planning process.

Get the Room151 Newsletter

Share

You may also like...

  • Devolution poses threat to council credit profiles Devolution poses threat to council credit profiles 4 Jun, 2015
  • Steve Mason: Borrowing power Steve Mason: Borrowing power 19 Aug, 2014
  • Inter-authority lending rockets by £2bn Inter-authority lending rockets by £2bn 11 May, 2017
  • Has Wales banned money market funds? Has Wales banned money market funds? 12 Dec, 2013

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 2 days ago

    Will new public procurement rules offer the best commercial results?: The government has issued a green paper on reforming procurement rules. Helen Randall and Rebecca Rees examine the proposals and argue they may not go far enough. The Cabinet… dlvr.it/Rqtw6T pic.twitter.com/9GiVTkL08U

    Room151 6 days ago

    The vaccine may help settle cash flows but inflation remains a risk: Sponsored article: Lauren Sewell examines the prospects for long-term borrowing as Brexit settles and vaccines are deployed against Covid-19. On the 9th October 2019 Whitehall sent… dlvr.it/RqZXCr pic.twitter.com/PzgOZOGQ0k

    Room151 6 days ago

    ESG in liquidity: Sponsored article: Gavin Haywood looks at the integration of ESG in Federated Hermes’ money market funds. Federated Hermes has over 300 public sector clients invested in our AAA rated money[...] dlvr.it/RqZX5f pic.twitter.com/E87sBXsay8

    Room151 1 week ago

    New realities of investing cash and liquidity: “What to do now?”: Sponsored article: Brian Buck looks at the “unique challenge” for cash management strategies. As investors assess the ongoing impact of the pandemic on their business, levels of cash and… dlvr.it/RqVbk9 pic.twitter.com/ZElVASmEUV

    Room151 1 week ago

    Extra finance promised by the government receives a broad welcome: Sponsored article: The financial pressures facing local authorities this year continue to pose challenges for council treasurers. While the launch of the UK’s Covid-19 vaccination… dlvr.it/RqTzTF pic.twitter.com/HCjH0pyHR5

    Room151 1 week ago

    A savvy approach to managing your cash: Sponsored article: Caroline Hedges examines the need for active cash management to achieve a higher than average return. Last year saw the already mountainous pile of negative-yielding debt around the[...] dlvr.it/RqTzMK pic.twitter.com/uP0RQYTJLt

    Room151 1 week ago

    Putting alternatives at the heart of multi-asset portfolios: Sponsored article: Nick Edwardson looks at the assets that provide the “most attractive opportunities”. We believe that asset allocation is the primary driver of investment returns and that the… dlvr.it/RqQ2Qt pic.twitter.com/WLBzvRRRUQ

    Room151 1 week ago

    Thriving in the pandemic: Avoiding the stragglers: Sponsored article: George Crowdy looks at the sectors providing opportunities for sustainable investment. Throughout much of 2020, we talked about why sustainable investing has thrived in the pandemic,… dlvr.it/RqQ2NQ pic.twitter.com/dxiPWKFsPl

    Room151 1 week ago

    The development of CCLA’s mental health benchmark: Sponsored article: Amy Browne examines the importance of investing in mental health in the workplace. We are living through a public health emergency in more ways than one. Physical health[...] dlvr.it/RqQ2Jx pic.twitter.com/o6yRSCX3oF

    Room151 1 week ago

    Brexit: What the EU trade deal means for the UK economy: Sponsored article: Hetal Mehta looks at the impact of Brexit on economic prospects. Four and a half years after voting to leave the EU, on Christmas Eve the UK finally[...] dlvr.it/RqLBDt pic.twitter.com/No62srfE8h

    Room151 1 week ago

    Cash dethroned: The quest for liquid yield: Sponsored article: Peter Hunt and George Carne ask how treasury departments can balance the need for yield and liquidity. The massive stimulus and waves of liquidity provided by central banks[...] dlvr.it/RqLBDj pic.twitter.com/05g6Zhu1kU

    Room151 1 week ago

    Richard Harbord: Delayed “capital determinations” make section 25 opinions a new crunch point: The severe pressure on local government budgets now means section 151 officers confront a tricky call on  whether they can make a judgement on the robustness… dlvr.it/RqLBDV pic.twitter.com/vTAbDKFzkI

    Room151 1 month ago

    PWLB Consultation: Analysis straight from Dickens: Helen Radall and Paul McDermott present a legal examination of the new PWLB borrowing rules as Charles Dickens might have imagined it. Free and easy PWLB (“Marley” to his friends)[...] dlvr.it/RnmwLq pic.twitter.com/yFxcPrQqEG

    Room151 1 month ago

    Room151’s top stories from a momentous year: 2020 was the year in which local government grappled with Covid-19, funding strains, controversy over borrowing rules and the threat of financial collapse. It has been an exhausting and historic[...] dlvr.it/RnlpZg pic.twitter.com/g3myNyox6J

    Room151 1 month ago

    Tracy Bingham: 2020, a year best forgotten but also one of learning: Many will rush to erase 2020 from their memories but, writes Tracy Bingham, there were also many lessons about finance teams, strategic planning and leadership. 2020: A year we’d… dlvr.it/RnlpY2 pic.twitter.com/m7G1krrtCu

    Room151 1 month ago

    Settlement must address ‘precarious’ local government finances: Dan Bates crosses his fingers for “no nasty surprises” in this week’s funding settlement but argues the “bigger prize” is post-Covid financial certainty. Thursday (17 December) should be the… dlvr.it/Rnj9dG pic.twitter.com/KLKjjuBqJE

    Room151 1 month ago

    PWLB consultation: Big change on the way but there are ‘grey areas’ and opportunities: The consultation on PWLB borrowing has concluded creating a new landscape for funding property acquisition. Our experts look at the implications. Tracie Langley The… dlvr.it/RndRvJ pic.twitter.com/KEqXEBmEfq

  • Categories

    • 151 News
    • Agent 151
    • Blogs
    • Chris Buss
    • Cllr John Clancy
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Forum
    • Funding
    • Graham Liddell
    • Ian O'Donnell
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • LGPSi
    • Mark Finnegan
    • Recent Posts
    • Resources
    • Richard Harbord
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Treasury
    • Uncategorized
  • Archives

    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Steve Freer: launching a new audit journey for local authorities
  • Next story Finance chief urges auditor scrutiny of PRS models

© Copyright 2021 Room 151. Typegrid Theme by WPBandit.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website.OK