February 2012
A message from our CEO: Managing risk starts with managing our choices
On January 26, 2012, Canada’s Prime Minister Stephen Harper addressed the economic forum in Davos, Switzerland. Given our country’s continued and strong economic performance, the Prime Minister’s speech was highly anticipated. Mr. Harper laid out Canada’s preparedness for the demographic and economic headwinds facing our country. I found his statement about recognizing that the choices we make today have a direct link to the outcomes in the future to be particularly relevant to managing a business during global economic uncertainty:
“In every decision – or failure to decide – we are choosing our future right now. And, as we all know, both from the global crises of the past few years and from past experience in our own countries, easy choices now mean fewer choices later.”
Building on that theme, I would add that in choosing a course of action we must also make an informed decision that puts clients’ concerns front and centre. While at the same time - and this may seem counter-intuitive - we still have to allow room for agility and responsiveness should more details emerge. Recent examples that demonstrate the validity of our approach include the U.S. Debt ceiling and the G-20 Summit in Toronto.
With the European exposure and securities lending in particular, CIBC Mellon began reviewing the region and managing risks well before the first headlines appeared. Our business model for assessing and managing risk is ongoing and rigorous. For example, in securities lending, we continue to monitor credit default spreads for both European sovereigns and European entities on a daily basis and review for any changes in our clients’ exposure. We also maintain strict collateral requirements for securities lending – all our borrowers are in good standing and fully collateralized. If you missed them in the November issue of Trade Talk, I would encourage you to turn back to commentary from Kelly Hastings and Jeffrey Alexander.
As with you – our clients – we have no more control over the global economic climate than we do the weather forecast. Providing excellent service is nonetheless something CIBC Mellon can control by applying a rigorous vigilance to anticipate, prepare and respond as conditions change.
Ultimately, excellence is a matter of choice – and we’ve made it ours.
By Tom Monahan, president and CEO
* * *
Trade Talk® is provided for general information purposes only and CIBC Mellon Global Securities Services Company, CIBC Mellon Trust Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use.
To print the entire newsletter, download PDF version.
