Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 34

Enterprise Risk Management

LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE	-	
MAGAZINE
-
N°99 - NOV /

DEC / JAN 2018

THE EVOLVING
ROLE OF
TREASURERS

34

The credit crisis and liquidity
shortages have positioned the
treasurer function at the heart of
the organization.

Are treasurers the new risk managers? After the Great Financial Crisis (GFC) of 2008,
the role of treasurers in financial institutions evolved naturally to respond to the rise of a holistic
organization-wide risk approach known as Enterprise Risk Management (ERM). The credit crisis and
liquidity shortages have positioned the treasurer function at the heart of the organization.
And naturally risk controlling has driven projects in the treasury area during the last decade.
In a context of low or negative interest rates, treasurers face the challenge to uncover opportunities to create financial performance while complying with costly regulatory changes introduced for
instance by Basel III. With the pervasive influence of treasurers in voicing their needs for the development of an ERM solution, one could easily confuse a treasurer with a risk manager. Not delineating the
two roles is nevertheless a pitfall with dangerous consequences.
The ERM term emerged in the mid2000s as an evolution of internal auditors reporting and as a response to a
growing regulatory pressure. In particular, the Sarbanes-Oxley Act requested
more stringent controls throughout the
organization in order to protect investors from the possibility of fraudulent
accounting activities by corporations.
An ERM collects information from any
identified risk area and addresses for
instance capital unavailability, political
turmoil, legal and regulatory changes.
In short, an ERM is a global risk governance approach that enterprises have
adopted in order to assess their risk,
decide the acceptable risk level and
implement mitigation measure overall.
The ERM implementation ultimately
favours the shareholder value creation
and leads to a competitive advantage
for the company.

In the past, treasurers were managing
risks mainly by identifying and hedging
financial exposures. Today treasurers
are asked to deal with a broader scope
of risks as their organization need
their expertise in the management of
liquidity, currency, capital, commodity,
counterparty risk, systems, banking
communication protocols, tax and
accounting regulations. Hence, the role
is becoming more diverse, more specialized and unarguably more complex.
Treasurers are increasingly taking the
lead on financial risk management in
ERM. To a lesser extent, they are also
contributing to provide responses to
other indirect risks such as operational
risks. Consequently, treasurers and risk
managers closely work together. They
constantly re-adapt their operating
procedures in order to best capture
and analyse needed information and
data. Only with collaboration and
proven methods can the risk function
anticipate what may negatively impact
the image and financial health of the

organization.
Whereas risk managers are responsible
for coordinating and modelling,
treasurers are acting as financial risk
specialists. Treasurers need to develop
a deep understanding of the risks borne
by their banking partners to appropriately assess, monitor and mitigate the
counterparty risk using metrics and
techniques requested not only by the
regulators but also by industry best
practices. Basel III capital adequacy
rules have reinforced the need for
monitoring several metrics, among
which, the CVA (Credit Value Adjustment) to reduce counterparty risk. The
CVA is relevant for treasurers when they
price their hedging transactions as it
differentiates derivative counterparties and novates trades to less-risky
counterparties. Another popular metric
highlighted by Basel III is the LCR
(Liquidity Coverage Ratio). It aims at
ensuring that the organization can
sustain a short-term liquidity shortfall.



Table des matières de la publication Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018

COUVERTURE
SOMMAIRE
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW with Dick Oskam, Head of Sales for Transaction at ING
FOCUS
Value generation - How to create (more) value for the company with a better capital allocation
Managing bank accounts, the Cinderella of treasury management
Treasury on the Digital Front Line
FORUM
Implementation of EU Tax Rules
Innovative payments solution
Construction de portefeuille : combiner gestion active et passive
Decision Time: Investing in Money Funds after EU Reforms
Payments as a Strategy
Are asia’s corporates ready to repo?
The evolving role of treasurers
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - COUVERTURE
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 2
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - SOMMAIRE
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 4
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - EDITORIAL
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - FINANCIAL HIGHLIGHTS Luxembourg Tax News
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 7
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - INTERVIEW with Dick Oskam, Head of Sales for Transaction at ING
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 9
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Value generation - How to create (more) value for the company with a better capital allocation
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 11
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 12
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 13
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Managing bank accounts, the Cinderella of treasury management
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 15
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 16
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 17
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 18
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Treasury on the Digital Front Line
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 20
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 21
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Implementation of EU Tax Rules
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 23
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Innovative payments solution
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 25
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Construction de portefeuille : combiner gestion active et passive
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 27
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Decision Time: Investing in Money Funds after EU Reforms
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 29
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Payments as a Strategy
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 31
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Are asia’s corporates ready to repo?
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 33
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - The evolving role of treasurers
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 35
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 36
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - THE FINANCIAL RISK OBSERVATORY
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 38
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 39
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 40
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - NEWS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 42
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 43
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 44
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 45
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 46
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 47
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 48
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 49
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 50
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 51
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 52
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 54
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 55
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 56
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