Tuesday, March 4, 2014

Treasury Management

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

Most larger banks have whole departments devoted to treasury management & supporting their clients' needs in this area. Until recently, larger banks had the stronghold on the provision of treasury management products & services. However, smaller banks are increasingly launching &//or expanding their treasury management functions & 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 & services tiered according to the needs of smaller clients, & investment in education & other best practices.

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

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