Emission Credits Trading
why certain counterparties could suffer negative consequences due to the
introduction of Emission Credits trading
Day BFOEs - Understanding the related Credit Risk
ICE Brent Crude Futures and 25 Day BFOE
(Brent-Forties-Oseberg-Ekofisk) Forward contracts create the basis
for the determination of the cost of more than 65% of the crude oil
bought and sold in the world. However the jargon and processes related
to the wider Brent Futures and BFOE market are not easy to unravel.
Understanding the credit risk implications is even more challenging.
This article clearly covers all important points.
Coal Markets Conference
On February 22, 2012 Ron Wells presented a paper
Management Techniques & Tools
, which focused
on Performance Risk at the 10th Annual Coal Markets Conference in Singapore. Click
to view or download a version of the presentation that includes
Art of Assessing, Quantifying and Managing Buyer or Supplier Future
Physical Performance Risk
Performance Risk is not the same as Payment Risk so it is not correct to
apply the same Probability of Default, Potential Future Exposure at
Default, and Loss given Default measures to both. The current
general practice of applying the same measures to both leads to an
usually exaggerated, assessment of the risks related to future physical
performance. An alternative method is proposed to answer the
response that 'there is no other way', and to initiate a
debate, was presented at the 3rd Annual Credit
Risk in Energy Trading Conference. Also
refer to an extended article on this subject by clicking this link: English;
or for the Chinese version click this link: Chinese.
Quantifying and Managing Buyer or Supplier Performance Risk in the
Physical World is the Challenge
This article discusses the methods currently used to assess Performance
Risk, their efficacy and what alternatives may be considered.
Additional comments can be read on the BWcr weblog: Margining
and Value at Risk - is there a better way?
Future Commodity Price Risk Can Damage Your Company’s Liquidity:
Hedging future commodity
price risk is something to consider, only if you guard against the
chance that the outcome could damage your company’s liquidity and/or
its competitive position. Click here
to obtain a copy of the Chinese version of the article.
THE FUTURE FOR CREDIT MANAGEMENT:
Credit Risk - The Future & Career Prospects
Ron Wells presented this topic at the IECA
Europe 28th European Credit Education Group Conference in Athens, on
June 24, 2014. Click here
to view or download the supporting presentation material.
Early 21st Century International Credit Manager (circa
This article explores the role of the International Credit
Manager in the 21st Century, by means of a fictional scenario set in Europe in
the year 2010. The art of Scenario
Planning is also explained.
|There is a better way to
manage your Credit Department, it just hasn't quite been invented yet
"In the early 21st Century commercial credit management is still
a mixture of art and science. It is almost exclusively focused on the
day to day micro-management of individual customer accounts or
individual sales transactions." This will change.
BPO & Friends have a Stranglehold on the LC and will soon finally
lay it to rest…
Read why every business that accepts Standby Letters of Credit as
collateral cover (security) for its sales transactions should switch to
requiring Bank Payment Obligations (BPOs).
Discover how the BPO-Plus (BPO & Friends) will gradually but
inexorably replace transaction related Documentary LCs over the next
five years or less.
The considerable rewards intrinsic to using BPO and electronic
documents in combination are available to every trading partnership
today; you should be benefiting - click here.
Payment Obligations (BPOs) – Basics for Corporate's
you are a Seller or Buyer of goods this article provides the basic
information you need in order to start replacing Standby Letters of
Credit and/or Documentary Letters of Credit (LCs) with the BPO or
BPO-Plus process respectively.
A Buyer's 'Purchase Confirmation & Payment Undertaking' linked
can be an alternative form of payment risk cover ('insurance') when the Buyer
refuses to provide an LC directly, or where the Seller wants to give the
appearance of providing unsecured (open) credit.
Other alternative Forms of
Payment Security - PN's and/or DG's
A practical guide for the use of Promissory Notes (PN's) and/or
Demand Guarantees (DG's) as payment risk cover, rather than Letters of Credit
Available in Russian and English.
of Credit Covering Oil Commodity Transactions
Jeremy Francis, formerly a Credit Specialist with ChevronTexaco Global Trading
(London), explains some of the novel features of these Letters
of Credit (LCs). He includes a discussion of Letters of Indemnity for Missing
Documents (LoIs) and Price Escalation Clauses.
Published with permission.
Jeremy via email at: Jeremy Francis
Letter of Credit Legal Decisions (Singapore
is probably the most important centre of trade finance in
. The linked notes cover a number of significant decisions on trade
finance handed down by the
courts in recent years. Kindly supplied by Toh Kian Sing of legal firm Rajah
Credit Insurance - Risk Cover Options for
This article explains two non-traditional
ways in which Credit Insurance can be put to work in high risk emerging
markets. These methods could provide profitable sales opportunities where none
CREDIT SCORECARD & LIMIT MODEL:
Trade Credit ScoreCard & Credit Limit
Model - A Report
Experts say ‘it cannot be done’, but you can read how one company
developed its own Trade Credit ScoreCard.
"(this) work serves as an excellent foundation for those interested in
building their own models. Studying (Ron's) methods and approach will also provide
credit professionals with an understanding of credit scoring in the B2B
Read this Institute of Management & Administration’s report on a
presentation given in New York - reprinted with permission.
Credit ScoreCard & Limit Model - Case
An animated PowerPoint presentation that leads you through the analysis of an
anonymous USA based Oil Refining & Petroleum Products Marketing company.
This is a combined Russian & English presentation that may take a few
moments to download.
Electronic Document Creation and Management -
including Bills of Lading
document management companies, such as essDOCS
and Bolero International, which
support BPO and related ISO 20022 messages, are enabling shippers, banks and
buyers to create baseline data as well as control the release of electronic
bills of lading until a BPO match is
Operating Effectively in the International Arena
Effective meetings and negotiations with people from other countries and
cultural backgrounds, requires careful preparation. "Respect"
is the key word. These three articles provide some guidelines based on practical
experience and research.
|Cultural Differences. This article outlines
some significant differences which must be borne in mind when dealing with
people from Europe, Russia, Central Asia and North America.|
|International Business Travel. This
piece lists some practical hints for International Credit Managers who are
preparing to travel to a country for the first time.|