Treasury Today July/August 2022

Published: Jul 2022



Rising risks

Treasury teams hoping for a quiet summer will look out on the political and economic landscape with a sense of trepidation. As this edition goes to press, UK governing politicians are more focused on a leadership contest following Prime Minister Boris Johnson’s resignation than the country’s urgent economic travails. All the while rising COVID cases in China threaten more lockdowns and corporates and markets are balancing key unknowns as quantitative tightening ratchets up and Central Banks start to shrink their balance sheets. Elsewhere, Europe’s energy crisis grows, and Japan is coming to terms with the assassination of Shinzo Abe.

Still, these occurrences, tragic and shocking, anticipated or unsurprising, are visible and real. This edition’s Insight and Analysis feature explores how deepfake technology that uses AI to train a computer to speak and act like a person poses a growing security risk for treasurers. Deep fake videos of Barack Obama have gone viral; the UK’s Queen dancing was another. But how this technology is being used to target treasury is no joke as duped treasury teams increasingly report.

In times of uncertainty, liquidity and working capital, the unsung heroes of corporate success, become even more important. We hear how some sectors like shipping are generating huge liquidity but others, especially those with large exposure to China, have worryingly less on hand as sales and revenue dry up. The feature also explores treasurers’ liquidity priorities in a climate of rising rates. Strategies include putting money into current accounts in a short-term approach, not committing on tenor but expecting maximum yield and banks to pass on the benefits of higher interest rates.

Our Back to Basics feature explores the potential of digitisation to boost access to trade finance, looking particularly at how digitisation and automation could encourage institutional investors into the asset class, unlocking billions of capital. Sticking with technology, our Regional Focus travels to Canada where payments transformation is gathering momentum as the country phases out an antiquated system dating from the 1970s based on a patchwork of scattered formats. Years in the pipeline, real-time, central payments infrastructure running on a standard model and able to integrate into global jurisdictions and international clearing systems is finally on the way.

Lastly, our Question Answered finds an emphatic response to today’s competitive market for talent: the best way to recruit and retrain treasury expertise is to guarantee WFH and integrate robust career development plans.

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