This week’s editorial meeting brought forth a number of issue we’ll explore over the coming days and weeks.
Treasury’s Value
What should or can be treasury’s role in supporting the growth of the business? With tools such as receivables financing, supply chain financing and overall knowledge of working capital and risk management, treasury can bring much to the table. It can be the lynchpin that keeps the company’s many sprawling financial functions together.
Treasury Strategies Briefing
US and Japanese corporate cash levels surged in the latter half of last year as did bank reserve balances at those countries’ central banks, rapid shifts that illustrate the uncertainty facing corporate finance executives. That’s according to consultancy Treasury Strategies’ Quarterly Corporate Cash Briefing. According to the firm, US corporate cash levels spiked 6.6 percent by the end of the third quarter, to $1.93 trillion, the highest level ever recorded. We’ll take a look at what this means in terms of cash management going forward.
Basel Impact and Prep
Also discussed in the Treasury Strategies’ Quarterly Corporate Cash Briefing was Basel III. The set of rules named after the Swiss Canton represents the most significant “game changer” faced by corporate treasurers in the long-term, according to a panel, although a handful of other issues, including the Volcker Rule and similar rules outside the US as well as central bank monetary policies, are likely to stir the pot. According to a survey of its banking clients, Treasury Strategies found that treasury and finance departments are taking the lead in Basel III preparedness and to a much lesser degree their business units. In addition, about half the surveyed banks’ business units were involved in preparations for Basel III, a nudge behind the IT department and well behind the treasury, finance and especially risk departments.
Bank Relationship Management
Bank partners are some of the most important relationships for a business. Selecting and effectively managing the right ones is a critical role for treasury. Having effective tools to measure and track the extent of the bank relationship as well as the level of service they are providing is a key ingredient successfully managing these critical relationships. This treasury responsibility is becoming even more important as the new capital requirements from the Dodd Frank and Basel III regulations drive banks to deploy their capital much more selectively, resulting in more scrutiny about whom they do business with and how much business they do.