Developing Issues: External Manager Fees; BBVA Profile; FX Policy Goals; T30 Agenda Items

February 03, 2011

What’s on International Treasurers’ radar screen this week.

This week’s editorial meeting focused on a number of issues, some stemming from upcoming NeuGroup peer group meetings and others from the world at large. These include external cash management fees, a profile of BBVA’s treasury capabilities in Latin America, and a discussion what should be the goal of an FX policy. Also to be explored are several agenda items that have piqued the interest of members of The NeuGroup’s Treasurers’ Group of Thirty (T30). 

External manager fees
Members of The NeuGroup’s Treasury Investment Managers’ Peer Group (TIMPG) are interested in fees for external managers, specifically how other members’ fee structures are set up. One question: Should the higher the investment, the lower the fees? Certainly other factors might play into fee structures, like other ancillary business the company may have with a bank or manager; nonetheless, members want to know if there is a range within which they should be paying.

FX policy philosophy
What is the purpose of the company’s FX program? A member of one of The NeuGroup’s FX Managers’ Peer Groups is reviewing his company’s FX policy, not so much to see how it is performing, but rather to see if it’s actually targeting the right risk. This member has conducted surveys of shareholders to see what they seek in an FX policy and is putting together a study of how a policy should be targeted to the specific needs and goals of the company.

BBVA profile
According to BBVA President & COO Ángel Cano, Latin America makes up half of BBVA’s earnings and is also “a medium- and long-term growth driver” for the bank. The NeuGroup plans to take a look at the bank’s corporate treasury business in the region and profile its strategy, footprint and capabilities.

T30 agenda
In setting the agenda for the T30’s March meeting, three topics have bubbled to the top in terms of popularity. Members have expressed a continued interest in the impact of the changing financial regulatory reform landscape in light of the Republican takeover of the House. Dodd-Frank’s impact on banks and derivative use has been a big issue for House Republicans like Alabama’s Spencer Bachus and Frank Lucas of Oklahoma. Also of interest is cash management in Asia and the use of regional centers (although not necessarily in Asia). Members also are interested in developing higher principles in treasury organization and the role and functions of direct reports.

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