Treasury Today July/August 2020

Published: Jul 2020



There is no ‘new normal’

Over the past few months the phrase ‘new normal’ has surfaced as a way of describing how we now live. But does it really mean anything? We live in a dynamic world where events, and our perceptions of them, are constantly changing. We are in a permanent state of flux so surely a ‘new’ normal exists no more than an ‘old’ normal. As Heraclitus argued millennia ago, the only constant in life is change.

Modern scientists knew that some form of pandemic was coming (and that others will follow) but no one saw precisely how and when COVID-19 would surface. The world has changed as a result, but then that’s what it always does, and humanity has thus far proven adaptable.

Adaptability is an essential survival skill. Ideally in society we help those who cannot reconcile the changes. But in business, at least those subject to the order of capitalism, those that cannot adapt are not carried; it is a case of survival of the fittest.

If a description of the world as it is right now, under varying degrees of lockdown, could arguably include the notion of ‘new normal’, then it should perhaps, at a societal level, be used to express how countless more people have been compelled by the pandemic into reassessing what is most important in their lives. Their decisions now may have a long-lasting effect or they may not.

However, at a business level, where constant change and survival of the fittest remain as true now as they ever did, the idea of a ‘new normal’ really is meaningless. In treasury terms, whilst different disciplines have risen up the agenda – liquidity management being of immediate importance – these activities have always been critical to organisational success. Failure to manage any aspect of treasury will soon be felt across the business.

In this edition, we recognise the dynamic nature of treasury, looking at how investment policies change according to need, and asking how treasurers can be more effective when trying to balance the outcome of the ‘liquidity, security, yield’ mantra.

We also take a closer look at that old foe, KYC, probing those in the know for ways in which treasurers can reduce the pain of this ever-changing burden. In our Question Answered feature this time round, we quiz a trio of experts about their approach to treasury policy revision in an unpredictable world.

Of course, we all recognise that treasury is nothing if not resourceful, adaptable, and innovative. This year’s Adam Smith Awards, conducted in the midst of the pandemic, demonstrates that even in the most challenging of times, here is a profession that delivers.

Having celebrated the winners in our virtual awards announcement on 8th June, we will be talking to the winners about their approach as part of our Adam Smith Awards Season. In doing so, once more it reveals that treasurers and their business partners never take their eyes off the ball. By continuing to proactively provide solutions across a wide commercial spectrum, whatever the circumstances, the idea of ‘new normal’ is indeed redundant: it’s just what treasurers do.

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