The Five Foundations of Treasury
1) Cash and Liquidity Management: Firmly at the top of a treasurer's list, effective management of cash is critical to the success of any business
2) Corporate Financial Management: How businesses manage their finances to maximise shareholder value
3) Capital Markets and Funding: Trading financial securities, including bonds, shares, derivatives and investments
4) Risk Management: Deals with the uncertainties arising from business opportunities and potential losses using a variety of tools and strategies
5) Treasury Operations: Structure of the treasury department, technology, policies, procedures and controls

Click on the pictures to download the specific document/presentation. See further below for blog articles.

Liquidity and Working Capital - In Charts

A presentation using charts to describe the principal elements of liquidity and working capital, plus categories of management and optimisation

Ten Steps to Create a Treasury Function

Outline of how to create a treasury department from scratch

KIMARE Risk Management Framework

A presentation on risk taxonomy, a new framework, with examples of the framework on FX, liquidity, interest rates, commodity and counterparty risks

ISO 20022 Implementation Plan

A presentation on what the ISO standard is, its benefits, and a stepped implementation plan with practical insights from my own experience.

Treasury Strategy Series, Part 1: Operations (coming soon)

Treasury Strategy Series, Part 2: Financing Strategy (coming soon)

Related Blogs

Risk Management

19 December 2024 - Interest Rates: the FED and BoE

On 18 December, the FED reduced rates by a quarter point, as expected, however stocks fell on the news. This is because the FED indicated it would slow the pace of rate cuts due to stubborn inflation, which could be exacerbated by a Trump presidency. Therefore, rates will not reduce as fast as the market had originally expected and had priced in, hence the fall in stocks.

Further, the BOE are holding rates steady and may cut its forecasted four quarter point drops next year to two or three.

For any surplus cash held by corporates and businesses, there is a significant opportunity cost if they do not invest this cash, especially given interest rates remain higher than inflation. Given the precariousness of the current economy, I would be tempted to utilise more short-term and easily accessible instruments, using the acronym SLY: Security, liquidity, yield, to set the policy and priorities. Diversification of investment instruments and third-party providers will help to reduce overall risk, as will the utilisation of counterparty risk metrics and monitoring.

MMFs and T-bills remain popular, however the treasurer should also look to CP and Repos as part of their overall investment strategy, as well as term deposits and CDs. Cash can often be realised before maturity on some of these instruments by selling in the secondary market, thus reducing liquidity risk.

Using liquidity forecasts to dictate how much to invest in short-, medium- and longer-term instruments is recommended, by segmenting your cash into term buckets. Moreover, daily monitoring and reporting is vital to ensuring control, showing yields and opportunity costs over the entire investment portfolio. One of the key measures to use is risk-adjusted returns, which is essentially the yield expected on an instrument adjusted for the level of investment risk of that instrument (e.g. the Sharpe Ratio). This measure can then easily be compared across different investment instruments.