Treasury management includes management of an enterprise’s holdings, with the ultimate goal of maximizing the firm’s liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm’s collections, disbursements, concentration, investment and funding activities. In larger firms, it may also include trading in bonds, currencies, financial derivatives and the associated financial risk management.

Most banks have whole departments devoted to treasury management and supporting their clients’ needs in this area. Until recently, large banks had the stronghold on the provision of treasury management products and services. However, smaller banks are increasingly launching and/or expanding their treasury management functions and offerings, because of the market opportunity afforded by the recent economic environment (with banks of all sizes focusing on the clients they serve best), availability of (recently displaced) highly-seasoned treasury management professionals, access to industry standard, third-party technology providers’ products and services tiered according to the needs of smaller clients, and investment in education and other best practices.

For non-banking entities, the terms Treasury Management and Cash Management are sometimes used interchangeably, while, in fact, the scope of treasury management is larger (and includes funding and investment activities mentioned above). In general, a company’s treasury operations comes under the control of the CFO, Vice-President / Director of Finance or Treasurer, and is handled on a day to day basis by the organization’s treasury staff, controller, or comptroller.

Bank Treasuries may have the following departments:

  • A Fixed Income or Money Market desk that is devoted to buying and selling interest bearing securities
  • A Foreign exchange or “FX” desk that buys and sells currencies
  • A Capital Markets or Equities desk that deals in shares listed on the stock market.

In addition the Treasury function may also have a Proprietary Trading desk that conducts trading activities for the bank’s own account and capital, an Asset liability management (ALM) desk that manages the risk of interest rate mismatch and liquidity; and a Transfer pricing or Pooling function that prices liquidity for business lines (the liability and asset sales teams) within the bank.

Banks may or may not disclose the prices they charge for Treasury Management products, however the Phoenix Hecht Blue Book of Pricing may be a useful source of regional pricing information by product or service.

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