Manage foreign exchange balance sheet risk

Trigger: The accumulation of foreign-currency-denominated assets and liabilities or a scheduled financial risk review initiates this process.

1. Identify foreign-currency assets and liabilities across business units
2. Calculate net balance sheet exposure by currency pair
3. Assess potential financial impact using exchange rate scenario modeling
4. Determine appropriate hedging strategies and exposure limits
5. Execute derivative contracts or structure natural hedges
6. Track hedge effectiveness and report on residual currency risk

Outcome: Net foreign exchange exposure is quantified, monitored, and mitigated through executed hedging strategies or structural balance sheet adjustments.