Chapter 7 - Relationship Management And Financial Service Provider Selection Flashcards
Account Resolutions
Is passed by the board and is the basic account or service authorization empowering a representative of the firm to enter into agreements for financial services
Service level agreements (SLAs)
May be a separate document or part of the service agreement. Primarily concerned with the definition of specific services provided and the operating metrics used to measure the level of device provided
RFP vs RFI vs RFQ
Input photo
Before administering the RFP Treasury Should
1) Define the Objective
2) Determine the Business Requirements
3) Develop the Project Plan
Bank Compensation
the way in which a bank is compensated for he entire set of products and services (i.t. the complete “book of business”) provided to a particular firm
RFP Administration major tasks
1) Development of the long list (initial vendor list)
2) Issuance of RFP
3) Evaluation of responses and creation of a short list
4) Meetings and demonstrations
5) Selection and contract negotiation
6) Implementation and post-project review
Earnings Credits
essentially imputed interest. Paid to commercial bank clients as away to get around regulation Q that forbade bank’s’ from paying interest on commercial accounts. Earnings credits can be used to offset bank fees
Value Dating
Changing the dates when balances are actually posted to accounts in such a way that it reduces the available balances which in turn reduces the interest earned on the account. The bank is compensated during value-dating either by not having to pay interest on positive balances or by earning interest charged on negative balances.
Common practice outside of the US
Earnings Credit Analysis (ECA) Systems
US banks typically provide their corporate customers with imputed interest using this system
Earnings Credit Rate (ECR)
the rate used to calculate the imputed interest on corporate accounts. This is usually negotiable
AFP Service Codes
Six-character, alphanumeric codes used by banks to provide standard, uniform references and terms of identifying, describing and reporting bank services, as well as the associated charges.
have been recognized as the standard since 1986
Account Analysis Terminology - Average Ledge Balance
the sum of the daily ending ledger balances (pos and neg) divided by the number of days in the analysis period.
Account Analysis Terminology - Average Deposit Float
the sum of the daily dollar amount of items (primarily checks) in the process of collection divided by the number of calendar or business days in the analysis period
Account Analysis Terminology - Average Collected Balance
the sum of the daily ending collected balances (pos and neg) divided by the number of days in the analysis period. sometimes calculated as the average ledger balance - average deposit float
Account Analysis Terminology - Reserve Requirement
the amount the bank must maintain with the federal reserve
