Treasury Today Country Profiles in association with Citi
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October 2007

Previous editions


Business as usual

One of the more interesting themes coming out of the EuroFinance conference in Vienna last month is that there was no one theme that everyone was talking about. Previous years have seen the banks talking about the same subject. Whether you go back a few years to systems and Y2K or the introduction of the euro, or in more recent times working capital management and managing the supply chain, there have always been dominant themes. This year was different. ABN AMRO as lead sponsor talked about the commercial impact of environmental issues but other banks all followed different themes.

You might have expected SEPA to be dominant this year. All the banks operating in Europe are certainly preoccupied with preparing for the introduction of the new payment instruments starting early next year. But no bank seems to have developed a coherent SEPA offering for its clients or at least no bank wanted to make a big fuss about SEPA. Perhaps Deutsche came closest with a promise to extend SEPA benefits to all its euro payment traffic.

The lack of new product offering around SEPA will be no surprise to regular readers who will have seen comment in our reports and editorials on this subject. There is still much for the banking industry to do in response to this politically dictated initiative and the short-term benefits for corporates are hard to see. Longer term it will be good news, but in the meantime the banks are not rushing to market with easy to adopt product offerings and most corporates seem to be adopting a ‘wait and see’ attitude.

Of course, SEPA cannot and should not be ignored. Any corporate reviewing cash management and banking arrangements in Europe should evaluate the opportunities SEPA presents. Similarly anyone changing systems should seek SEPA compliant systems. But SEPA was not the dominant theme at the conference and is not the dominant theme with the users of banking services even if it is preoccupying the suppliers of banking services – all the banks operating in Europe.

The lack of an overriding theme is good news for corporate treasurers who can get on with the initiatives that will add value to their businesses rather than having to evaluate the latest trend and then explain why it is actually not as relevant to their company as other initiatives. This does not mean that all the previous trends are irrelevant. On the contrary, all the principals of good cash and treasury management are as important today as they have ever been and technology continues to give us new tools with which to tackle old problems.

So improving cash flow forecasts, managing liquidity, rationalising banking relationships, centralising where it makes sense, leaving alone where it does not and controlling risk are as important as ever. So also is effective working capital management and looking at how the supply chain (both physical and financial) can be managed better in this integrated world of open-account trading. The point is that each company is in a different place organisationally and the initiative that is right for one company is not the same as the initiative that benefits another.

You could say that treasury can get back to business as usual.