 Steven Klein, head of multinational global banking at HSBC Korea |
A global banking expert says that multinational companies, including Korea’s major players, should make greater efforts to manage funds in a more integrated way in order to maximize returns and minimize losses in the globalized environment.
In an interview with The Korea Times, Steven Klein, head of multinational global banking at HSBC Korea, stressed that in order to prepare for unexpected shocks, global firms should open an integrated banking account and have plans to hedge against foreign currencies.
“By concentrating all funds into a centralized account, multinationals can maximize the interest they earn on their surplus cash or minimize the interest they pay on their short-term borrowing,” said Klein.
The HSBC executive also emphasized the importance of FX management, a critical area for multinationals. In particular, he points out that managing the Korean won is more challenging because the local currency is vulnerable to outside factors due to lack of convertibility in international markets.
Klein says that multinationals operating in Korea should seek ways through derivatives, such as forwards, to hedge their exposure to the Korean won and sustain the value of their assets.
The Swiss-born financial expert hoped that increasing numbers of multinationals will flock to Korea, which will in turn lure foreign investors.
“Some Korean multinational companies are among the most successful ones on a global basis, which is clear to everyone. And this is also one important factor in attracting foreign multinational companies into Korea.”
Klein added that multinationals need to pick a banking partner that can provide guidance regarding foreign direct investment (FDI) processes and requirements when they establish operations in a foreign country.
“Multinationals need to rely on a bank which is able to effectively advise them as to what procedures need to be followed.”
He said that the British banking giant is an optimal lender that is prepared to help multinationals manage their financial assets and foreign currencies through its far reaching worldwide network.
“What makes us truly unique is the connectivity that we are able to deliver through our great global network combined with very strong domestic capabilities in Korea.”
Klein studied international relations at Geneva University and got his masters degree in the politics of world economy from the London School of Economics.
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