Training in Commodities Derivatives for the Central Bank of Cuba

Corporate Banking Products & Markets, Treasury

Trade in commodities is a core part of the Cuban economy.

Trade in commodities is a core part of the Cuban economy. Financing this trade, and hedging the risks that emanate from it, are an important part of the activity of Cuban banks. The overall aim of the project, funded by the UK Government’s Prosperity Fund, was to share with Cuban banks and bankers best practice in managing commodity price risk. GBRW Learning developed and delivered a three-day training course to Cuban central bankers and commercial bankers.

GBRW’s Commodity Derivatives training programme was designed to clarify the opaque world of physical commodities and the constantly evolving commodity derivative markets. This comprehensive course takes participants through the main commodity sectors, and illustrates how price risk arises and can be managed. By the end of this course, participants will be able to identify selling opportunities within the bank’s existing customer base, structure and implement appropriate derivative solutions, and understand the measures and controls that will help the bank run a commodity business. It is especially geared to bankers and institutions in emerging markets, where commodities are often vital to the local economy and domestic banks lag the large international commodity players.

Deliverables included the design and delivery of a programme which gives participants:

- A solid grounding in relevant commodity sectors, and the applicable terminology

- A practical knowledge of the unique features of the commodity derivative markets for each sector

- A sound understanding of derivative structures and their applications

- A detailed insight into how to de-risk commodity lending transactions, and an informed ability to determine the credit risks relating to different types of structures

- An appreciation of the suite of products available to investors

- The confidence and knowledge to question and challenge subject matter experts