04 May 2012
Treasury operations in banks are in a state of change. Where once treasurers were charged solely with managing cash flow across the enterprise, today treasurers are responsible for managing risk across the enterprise as well. The recent financial crises have added the additional responsibilities of managing liquidity and market risk, and the success of these tasks has significant impact on the competitiveness of the institution. Additional demands on treasury operations are coming from customers – many enterprises want value-added services from their bank that will help improve visibility into the companies’ risk and cash positions, and help them improve liquidity management by projecting liquidity requirements in the future.
The result of these changes in treasury operations means that superior treasury management can not only protect the bank from risk, but help attract new corporate customers as well. And when leading financial institutions throughout the world want a superior treasury operations solution, they turn to SunGard.
also noted that:
The primary functions of a treasury department at a bank involve asset/liability management. A substantial amount of time is invested by the department in forecasting net interest income (NII) and measuring the bank's interest rate risk (IRR) or sensitivity to changes in prevailing interest rates. The statistics generated by the department are typically fed to the bank's Asset and Liability Committee (ALCO), the group which is responsible for establishing guidelines for risk taking and balance sheet funding.
The treasury department generally performs other related functions, such as managing the bank's reserve and risk capital requirements, funding the bank's balance sheet through a number of creative strategies (this is typically done in conjunction with the bank's corporate investments unit), and managing the institution's insurance requirements - property and casualty, directors and officers, and BOLL (Bank Owned Life Insurance).
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