Treasury management or treasury operations includes management of an enterprise's holdings, with the ultimate goal of managing the firm's liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration, investment and funding activities.
In larger firms, it may also include trading in bonds, currencies , financial derivatives and the associated financial risk management. Most banks have whole departments devoted to treasury management and supporting their clients' needs in this area. Until recently, large banks had the stronghold on the provision of treasury management products and services. A number of independent treasury management systems TMS are available, allowing enterprises to conduct treasury management internally.
For non-banking entities, the terms Treasury Management and Cash Management are sometimes used interchangeably, while, in fact, the scope of treasury management is larger and includes funding and investment activities mentioned above. In addition the Treasury function may also have a Proprietary Trading desk that conducts trading activities for the bank's own account and capital, an Asset liability management ALM desk that manages the risk of interest rate mismatch and liquidity; and a Transfer pricing or Pooling function that prices liquidity for business lines the liability and asset sales teams within the bank.
Banks may or may not disclose the prices they charge for Treasury Management products, however the Phoenix Hecht Blue Book of Pricing may be a useful source of regional pricing information by product or service. Concerns about systemic risks in Over The Counter OTC derivatives markets, led to G20 leaders agreeing to new reforms being rolled out in Trades and their daily valuation should also be reported to authorized Trade Repositories and initial and variation margins should be collected and maintained .
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