The purpose of this seminar is to give you a good and practical understanding of the objectives, tasks, tools and controls of modern treasury management.
We start with a general discussion of the role of the treasury function in banks. The importance of funding choices and sound risk management will be explained, and we define the scope, level and content of the tasks of a "typical" treasury function. We also present an asset-liability framework for treasury management.
We then take a closer look at the organization of a "typical" treasury function. We define the scope, level and content of the function, and we suggest appropriate policies and procedures the day-to-day treasury operations. We also explain the scope and functions of the front, middle and back office operations of the bank treasury.
Further, we discuss what qualifications are required for treasury staff, and we explain how to build core treasury skills, including the practical handling of financial instruments (dealing, clearing, settlement etc.). We present a sample job description and discuss the learning requirements of senior and junior treasury staff.
On day two, we first give an overview of the risks that are faced by the treasury function. The purpose is to give you an overall understanding of how these risks can affect the overall profitability and solvency of the bank. Further, we explain and demonstrate with a number of practical examples how derivate instruments can be used to manage treasury risks. Applications include interest management, spread management, yield enhancement and asset-liability management.
Finally, we give you a thorough review of practical issues related to treasury controls, accounting and reporting. We carefully explain how fundamental operating and organizational controls such as the segregation of duties, rules for dealing, risk limits, access controls, handling of confirmations and settlement etc. should be designed, implemented and monitored. We give examples of important external (regulatory) and internal (management) reporting, including position, profitability and compliance reporting. Accounting issues include "fair value" accounting for financial instruments under IFRS and US GAAP. We also discuss the role of the Internal Audit and explain how audit procedures should be designed to test the internal controls and the accuracy and the propriety of the transactions.