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Liquidity management

There are some significant changes occurring this year in the euro payments arena i.e. developments on SEPA and the introduction of the Payment Services Directive (PSD).

These, together with the need for companies to make savings and for banks to find new ways of making profit, will have considerable ramifications for corporate liquidity management.

Gloomy? Don’t trust consensus?

Less confidence about the UK economy and expectation of a UK pensions crisis were the almost unanimous view of the excellent ACT Annual Conference in Manchester.

John Humphrys, chaired a fascinating “Question Time” as the last conference session. A very well balanced panel (Paul Boyle, CEO of the Financial Reporting Council, Barbara Cassani, Executive Chairman of Jurys Inn, Trevor Williams, Chief Economist of Lloyds TSB, and Alastair Clark, former Executive Director and Advisor to the Governor, Bank of England).

Finding cash efficiencies and saving on pensions

Even if there seemed to be a dismal outlook for the UK economy, delegates at the ACT annual conference were able to gather lots of sound advice on how they could do their own bit to help their companies weather the storm ahead. The lack of bank lending capacity was certainly one theme but cash management and cash conservation was addressed in a direct response to this. In practical sessions, whether on treasury technology, risk, pensions and obviously cash management, the recurrent message was to focus on better use of cash within your group.

A plea for simplicity

The optimism “swingometer” took a lurch to the pessimistic side on day two of the ACT Annual Conference. The presentation from Alchemy’s Jon Moulton looked at the new order in finance. Much of the current financial crisis, he explained, had arisen from an excess of complexity so the true risks had remained hidden. There would be more regulation to redress this, but he doubted its effectiveness unless banking business could be simplified. The skills of regulators and bank directors are limited, so complexity has to be reined back: Basel II is rubbish….We need to get back to something simple. To

Bankers and treasurers fail to see eye-to-eye

Observing the attitudes of 500+ treasurers and bankers gathered at the ACT Annual Conference is providing a good indicator of sentiment.

While more is to come, at the end of the first day there seems to be a small glimmer of optimism from the corporate side while from the financial side pessimism prevails. The non-financials see credit margins beginning to turn downwards, while the banks are still talking them up.

Treasury primer

Irrespective of the size of a company, its geographic location or its range of business, it needs to answer the following questions…

  • what treasury activities does it have?
  • who is responsible for them?
  • what are the limits of their authority?
If we accept that businesses need comprehensive risk management at their heart, then the education, experience and skills of a treasurer make him or her the most suitably placed business executive.


Are we seeing the first ‘green shoots’ of banks entering the lending markets?

Managing currency risk

Companies across the board are finding the volatility in foreign exchange hard to deal with particularly in view of the reduced availability and variable pricing of hedging products.

FX divisions in banks are now highly profitable. About the only thing that we can forecast for certain this year is that any sort of FX hedging for corporates is going to be expensive and the advice is “shop around”. This month the links below focus on the prospects for sterling and also include reports on how certain companies are managing their currency risk in this environment.


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