How Bank Treasuries Shine During Crises

This article was first published on 2 April, 2020.

During the global financial crisis, banks were given liquidity and saved by governments.  In 2020, banks are much stronger in terms of both liquidity and capital.  During the coronavirus (COVID-19) crisis, businesses are fighting to survive, rather than banks.  The role of banks now sits in the centre of governments’ efforts to keep the economy functioning.  The government is looking to banks to give customers liquidity and credit.

Within banks, treasury is the lynchpin or flywheel.  It knows the banks’ own liquidity uses and sources.  Thus, it also has the information from the banks’ customers of their uses and sources of liquidity—and most importantly how this is changing.

Until a few weeks ago, treasury was focused on efficient and low-cost liquidity management at minimal risk to the bank itself.   Governments are now relying on banks to support their efforts to keep the economy and society functioning.  Banks need to work closely with governments and central banks to speed up both monetary and fiscal policy implementation. 

We have identified three pillars of activity that bank treasury functions need to embrace in order to play this new role effectively. Our latest roadmap shows how bank treasuries can take a leading role through these uncertain times.