Barclays Capital plans to expand its German corporate risk advisory business as more accounting rules drive cfos to consider the impact of hedging on the company's balance sheet. Martin Gueldenberg, director and German head of corporate risk advisory in Frankfurt, said the firm plans to hire one or two marketers with cross asset class experience. Most of the department's business revolves around interest-rate and foreign exchange risk, but equity and credit risk are also increasingly important.
The International Accounting Standard 39 and U.S. GAAP accounting are the key drivers to developing products, said Gueldenberg, adding, "Most decisions are accounting driven." The accounting standards transfer the volatility of derivatives products to the company's balance sheet, which has made some corporates move toward plain-vanilla products with lower vol, such as swaps.
