Depending on the size of the business unit, a small financials
section allows the treasury business head to have a ‘hands-on’ role for all
financial aspects of the business. These include not only the income stream
from the product mix for a particular bank, but also the cost base supporting
each type of product. Many products overlap, both in terms of use (for example,
swaps done as trades and hedges) and in terms of processing – including
systems. For instance, one back office system may be used to process all
derivatives executed. This can make it difficult to isolate the income stream
(and the proportion of people committed in producing it) and the corresponding
processing costs, unless the full structure of the business is thoroughly
understood. Moreover, most treasuries form part of a larger bank and therefore
have group business directives or requirements of which to take notice. This
may mean that a specific product is continued with as a service to customers or
even a ‘loss leader’ because of an overall bank view that it should be in a
particular market. In short, the product portfolio must be properly costed and
accounting staff dedicated to treasury can have a vital role in this area. In
an ideal world, the suite of reports required by the regulators would be entirely
system generated and require no intervention. In practice, treasury is a rapidly
evolving area with systems tending to lag behind the business and there
Needs to be liaison with the unit responsible for submitting
returns (usually the
Finance
area) to keep it informed of developments.
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