What’s on International Treasurer’s radar screen this week.
On the heels of stress testing banks in Europe, more attention is being paid to the balance sheets of Chinese banks.The recent IPO of Agricultural Bank of China, the last of the four largest Chinese banks to list, has also prompted reviews, since investors other than the Chinese government are on the hook for some of the risk. We will sort out the recent commentary and give treasurers some indication of what they can do.
Cash investment management
The NeuGroup’s Treasurers’ Group of Thirty (T30) is conducting a special survey of its members on cash investment management infrastructure, including number of heads, tools and systems and methods for credit analysis. Benchmarking cash investment resources is obviously timely, given the widely-reported rise in cash levels corporates are keeping on their balance sheets.
Speaking of cash management generally, it should be noted that The NeuGroup’s Global Cash and Banking Group’s(GCBG) Principles for World-Class Global Cash Management Project survey has been launched today with the assistance of Citi, as meeting sponsor. While the full results are reserved for group members, International Treasurer will be reporting on highlights in coming months.
Risk oversight
In line with recent articles on corporate ERM, including the role of a Chief Financial Risk Officer, ongoing discussion amongst members of The NeuGroup’s Bank Treasurers’ Peer Group (BTPG) concern the extent to which banks are setting up separate risk oversight (and separate from audit/risk review) specifically for treasury and ALM activities. So, banks may consider setting up a group to oversee, for example, simulation and VaR modeling.
We will monitor just how nuanced risk oversight needs to become as part of corporate governance discussions being promoted by regulators. Eventually, the risk governance developed in banks tends to trickle down to non-financial corporations, so we will consider risk oversight trends in this context, too. It would seem that regulators want to have multiple layers of oversight to blame when risks are overlooked—before a finger gets pointed at them.