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Cash Management > Cash Management > Flashcards

Cash Management Flashcards

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1
Q

What does Cash Management offer

A 
Streamline Bus. Processes
Realize greater operational efficiency
Manage Working Cap more efficiently
Reduce Finance Costs
Achieve greater return on your assets
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2
Q

What is the spread?

A

Difference between the Borrowing Rate and the Lending Rate

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3
Q

How Does TTS Generate Revenue

A

NRFF Spread & Float
FX
Fees

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4
Q

TTS Value to Citi Franchise

A

Generates Annutity Revenur
Less credit intensive
Generates over 415BN of liabilities (customer deposits)
Leverages global presence of Citi
Creates regular interaction with client base

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5
Q

What is Treasury Management

A

Ensure the availability of short term liquidity and on going funding to support continued operations and growth and to manage financial risks in a business

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6
Q

What is the Treasurers focus?

A

Reduce Cost of Funding
Provide Liquidity
Manage Risk

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7
Q

Debt Versus Equity

A

Tax Implications
Financial Measures
Financial Leverage
Freeing up Working Capital

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8
Q

List the 4 types of Market Risk

A

FX
Interest Rate
Equity
Commodity

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9
Q

List 4 Types of counter party risk

A

Credit
Liquidity
Settlement
Concentration Risk

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10
Q

List 4 types of Cross Border Risk

A

Political
Convertibility
Transfer ability
Expropriation

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11
Q

List 4 Types of Operational Risk

A

Fraud
System
Controls
Regulatory

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12
Q

What is Basel 3

A

Basel III is a global regulatory standard on bank capital adequacy, stress testing and
market liquidity risk agreed upon by the members of the Basel Committee on Banking
Supervision in 2010-11 to be implemented progressively through to 2018

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13
Q

Implications of Basel 3 for Banks

A
  • Cash Management become even more attractive
  • New bank investment products and charging methodology
  • Greater focus on Working Capital solutions and Corporate Debt Issuance
  • Higher costs for OTC Derivatives
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14
Q

What is the difference between Central Treasury vs Shared Service Centres

A

• Central Treasury covers financial risk,
liquidity and funding & investment
• Systems used are Treasury
Management Systems

• Shared Service Centres handles administrative functions across a corporation
- Systems used are ERP systems that run
all functions across the entire company

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15
Q

What is clearing

A

The process of transmitting, reconciling and, in some cases, confirming payment orders prior to
settlement
‒ Possibly includes the netting of instructions and the establishment of final positions for settlement.
‒ Often the term is used (imprecisely) to include settlement.

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16
Q

What is Settlement

A

‒ An act which discharges obligations in respect of funds transfers between two or more parties.
‒ A settlement may be final or provisional.
‒ Settlement typically occurs across Settlement Accounts held at the Central Bank

17
Q

Purpose of RTGS

A

Designed to eliminate settlement risk in the payment system
‒ Ensures intra-day finality
‒ Payments are irrevocable
‒ Eliminates systemic risk in the payment system
• Settlement immediately - bilaterally - across settlement accounts with the Central Bank
• Intra-day positions are covered using various techniques:
‒ A collateralised credit facility with the Central Bank
‒ No debit position allowed on Settlement Account
• Can create bank exposures with Central Bank

18
Q

Payment Settlement Risk Mitigation Techniques

A

Unwind
Central Bank Guarantee
Defaulter Pays
Survivor Pays

19
Q

Resident vs Non Resident Account

A 
• Definition of a Resident
‒ A company that is legally incorporated, or an individual that is domiciled, for tax purposes in that
country
‒ A non-resident is anyone else
• Why is it relevant?
Tax Treatment 
Reporting 
Banking Services
20
Q

What is SWIFt

A 
A co-operative
organisation serving the
financial services industry
A provider of highly secure
financial messaging
services
The financial standardisation body
21
Q

SWIFT FIN and InterAct

A

SWIFT provide two methods for message-by-message communication

22
Q

What is SWIFTNet FileAct

A
  • Provides a secure and reliable file transfer service
  • Used for sending high volume data, such as:
  • Supports Store-and-Forward or Real-Time transfers
  • Provides workflow tools

Cash Management (1 decks)

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