Treasury Risk Management Study

With unprecedented falls in interest rates and an uncertain credit risk backdrop, the landscape for local authority treasury risk is shifting.

Revenue pressures further heighten the risks being run in every treasury portfolio. Local authorities face significant challenges to ensure their strategies meet their long term goals.

CIPFA and PSLive are delighted then to announce the return of the Treasury Management Risk Study as of 30 September 2016.  Previous years have seen over 200 participants, and we believe the largest study of its kind will be even bigger and better this year.

Why participate?

  • access to sophisticated risk analytics
  • valuable aid to strategic decision making
  • objective reporting of portfolio positioning compared to Universe
  • enabling the treasury team to gain maximum benefit from cross LA discussions
  • consolidated results communicated with policy makers and stakeholders (e.g. CIPFA Capital & Treasury Management Panel, HM Treasury, DCLG, National Audit Office) to inform national debate
  • it's FREE of charge.

What is the Risk Study?

The Risk Study provides objective quantification of your authority’s treasury position set against the best practice CIPFA treasury risk framework, and places you in the context of your peers. The analysis is carried out based on your portfolio positioning,  latest balance sheet position and projected spending plans and will help inform key questions such as:

  • are my capital spending plans affordable?
  • what is the likelihood of meeting my net interest budget over the medium term?
  • am I comfortable with the amount of interest risk being run?
  • am I over/under borrowed?
  • what should the profile of any new borrowings look like?
  • is my credit risk exposure acceptable? How much cash do I need to keep liquid?

There are 2 participation levels: Risk Study Lite, and Risk Study Professional. CIPFA strongly urge authorities to participate at the Professional level in order to obtain maximum value from the exercise.

Risk Study Lite

Lite results will be instantly available, are based purely from portfolio data provided and provide a snap-shot of your positions compared to the universe including:
  • Credit Risk v Return
  • Investment Duration v Universe
  • Investment Rate v Universe
  • Borrowing Rate v Universe.

Risk Study Professional

The outputs for Professional participants takes this to another level and provides the long term projections that are essential in the financial planning process. The Risk Study provides the tool to turn the concepts of the Prudential Framework into a reality and deliver the revenue impacts of capital financing plans, taking account of market expectations and risk to those projections. It is not possible to manage treasury risks without first understanding the relative significance of these risks, only then is it possible to ascertain whether these exposures sit within comfortable tolerances.

The recent falls in interest rate expectations have further emphasised the need to effectively manage interest rate risk as, again, the benefit of hindsight may have resulted in different decisions being made.

Key decision makers need to therefore be mindful of these risks when setting strategies and be open minded to ways of managing the revenue exposures when measured in an objective framework.

Register free of charge

Participation is FREE OF CHARGE. Register to participate and once the Study is open, authorities will be able to login and enter their data. This data should be readily available within Treasury and Capital Financing teams, and consists of:

  • Portfolio positions
  • Key Balance Sheet Data (Professional only)
  • Key Capital Financing Plan data (Professional only)
  • Key Revenue Budget Data (Professional only).