Risk Management explained by treasuryXL

26-05-2022 | treasuryXL | LinkedIn


From a Treasury perspective, Risk Management is the practice of planning for unexpected expenditures. It is primarily about mitigating and avoiding the impact of the changing financial environment on the company’s cash flow objectives.

Risk management is a broad term, though. Depending on the context of a company’s operations, it can also have very different meanings, so it is also useful here to point out the forms of risk management that fall outside the scope of Treasury. This is not an article about governmental regulation, earthquakes, political instability, or the threat of potential new business competitors. These forms of risk are the concern of other departments within the corporation. This article is about risk management specifically within the context of Treasury.


Click on the image below to learn more about Risk Management.

  • What does a Risk Manager do?
  • Examples of Risk Management activities
  • Frequently asked Risk Management questions
  • Risk Management summary

Looking back at the FinanzSymposium in Mannheim, Germany, organized by SLG | Pieter de Kiewit

25-05-2022 | treasuryXL | Pieter de KiewitLinkedIn |


We at treasuryXL consider it our task to inform you about all that’s interesting in Treasury. Last week Schwabe, Ley & Greiner organized their FinanzSymposium for the 33rd time. One of our partners, Pieter de Kiewit of Treasurer Search, volunteered to go and check it out. This is what he came back with.

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Digital rules (URDTT) for Trade Finance: Episode 4

25-05-2022 | Wim Kok | treasuryXL | LinkedIn |

Episode 4 of a series of educational videos on URDTT (Uniform Rules for Digital Trade Transactions) is now available. Please take a look and let me know what you think.  Previous episodes 1 are, of course, still available on our YouTube channel.



Trade Advisory Network Limited and treasuryXL Trade Finance experts launched their fourth episode of a series of free, educational videos on URDTT. There will be 6 episodes in total covering all aspects of the development, interpretation, and application of URDTT in the context of a digital trade strategy. In the upcoming period, you can expect one educational video per month.

Duration: 16.42 min


Enjoy, explore and develop!

Interested to know more about this topic and the upcoming educational videos? Contact our Expert Wim Kok.


Wim Kok

International Business Consultant
Trade Finance Specialist





Turbulent markets put focus on evaluated pricing

24-05-2022 | treasuryXL | Refinitiv | LinkedIn |


Fixed income volatility looks like it will be around for a while, due to whipsaw-like changes in the overall economic environment. In such an environment, firms need to have the right evaluated pricing to ensure they are pricing their portfolios at fair value levels and that they are complying with regulations.


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Winding Down Russia: Treasury Challenges

23-05-2022 | treasuryXL | ComplexCountries | LinkedIn |


This was our third call on the situation in Russia. It focused on the practical challenges people are facing: nearly all participants are either running down their businesses or continuing on humanitarian grounds for products which are exempted from sanctions, particularly in the healthcare sector. However, as one participant put it, winding down is easier said than done.

This report was compiled by Monie Lindsey. based on a Treasury Peer Call chaired by Damian Glendinning.

We are happy to share a copy of the full report FREE, please contact us and mention ‘Russia Report’ in your message.


Chair’s Overview

This was our third call on the situation in Russia. It focused on the practical challenges people are facing: nearly all participants are either running down their businesses or continuing on humanitarian grounds for products that are exempted from sanctions, particularly in the healthcare sector. However, as one participant put it, winding down is easier said than done.

  • Many businesses operate through franchises in foreign countries. Terminating the franchise agreement may not be enough to stop them from continuing the business and using the brand name – some high-profile companies which have stopped operations still have franchisees who are continuing to trade, using the name.
  • In some cases, the name remains on the business. This makes it difficult for the brand owner to walk away, as the reputational risk remains.
  • People in the healthcare sector feel a need to carry on for humanitarian reasons. For them, there are significant logistical challenges getting new shipments into the country: no flights, very little sea freight, so heavy dependency on road transport, with limited willing suppliers. They are encountering an additional issue: sanctions apply based on customs codes, and some health care products have not been appropriately coded.
  • In other sectors, companies continue to sell down their existing inventory – but even this can be complicated, as fresh inputs can be required to make goods saleable.
  • Still, other participants have operations that are purely local, and do not require imports. These will typically continue to function, though moves are being made to make them fully independent.
  • Despite all the above, most participants continue to be able to pay down intercompany debt, pay dividends and settle outstanding intercompany invoices.
  • Cash operations are complicated by the need to segregate payments emanating from sanctioned banks. Again, this seems to work, and customers are usually willing to transfer their payments to non sanctioned banks.
  • Many Russian entities have taken steps to disguise their real ownership as a means of evading sanctions: some participants are using a database to identify the true beneficial owners to see whether sanctions apply.
  • Most international banks continue to function, but SocGen recently announced it is selling Rosbank. This raises the concern it may be sanctioned in the future.
  • Most international banks are refusing to open new accounts, and none is interested in taking deposits. This is a concern for participants who are building up cash balances as they sell down inventory. Raiffeisen seems to be the major exception to this.
  • It continues to be possible to convert RUB into hard currency – as long as you are not using a sanctioned bank. Hedging is also possible, but liquidity is limited and deliverable forwards are not available. NDFs seem to work.
  • Several participants have had to remove their Russian subsidiaries from their centralised treasury structures and in-house banks. This has resulted in the hiring of new local staff to manage the newly independent operations.
  • One participant raised the concern that Russia may be branded as a state sponsor of terrorism. This would complicate matters even further.

Bottom line: despite the length of this summary, there are still further details in the report below. Please read it. The overwhelming feedback from the call was that everyone is trying to comply with the sanctions, and business is either being scaled back, or completely localised. People have stopped looking for ways round sanctions – but compliance is complicated.

The full report on Winding Down Russia: Treasury Challenges is available to subscribers. Please get in touch for details. Enquire

Vacancy | Manager Treasury & Corporate Finance

20-05-2022 | Treasurer Search | treasuryXL | LinkedIn |


Treasurer Search has a new vacancy: Manager Treasury & Corporate Finance. The Manager Treasury & Corporate Finance has a relevant Masters degree, and has 8+ years of experience within Treasury/Corporate Finance. She is expected to be analytic, have strong communicative and presentation skills. TMS experience is a big plus


Tasks Manager Treasury and Corporate Finance

As the right hand of the Head of Treasury you are responsible for:

  • Co-leading all activities for Treasury Operations, Corporate Finance ánd Risk Management (with focus on the last two area’s);
  • Ensure and advice on the company’s compliance with financial and non-financial covenants;
  • Key contact person for internal and external stakeholders (banks, rating agencies, other finance departments);
  • Reporting and presenting results, internally and externally.

Ideal Manager Treasury and Corporate Finance

The ideal candidate:

  • Has a relevant Masters degree;
  • Has 8+ years experience within Treasury/Corporate Finance;
  • Is analytic;
  • Has strong communication and presentation skills;
  • TMS experience is a big plus.

Our Client

Our client is well-known and developed a sophisticated and international treasury team in a short span of time. Shareholders are demanding and expect nothing but the best. Employees are supported according to modern HR standards.

Remuneration and Process

The maximum base salary for this position is €85K. On top of this they offer a bonus and have a benefit package structured in a modern way leaving employees room to choose for what they value most. For interested candidates who qualify further information is available.

Did you know that you can update your profile online and apply easily for this vacancy via the button ‘apply’ below? Read more about practical aspects of applying in this blog. Some of our clients ask candidates to take the Treasurer Test.



Contact person

Kim Vercoulen
T: +31 850 866 798
M: +31 6 2467 9339

The Role of APIs in Strategic Cash Forecasting

19-05-2022 | treasuryXL | Kyriba | LinkedIn |


By Andrew Deichler, Content Manager and Strategic Marketing


Cash forecasting has undergone some substantial changes over the past couple of years. While forecasting has always been important, the COVID-19 pandemic highlighted just how critical it is, and why CFOs are prioritizing it more than ever.

In a recent webinar, Bob Stark, global head of marketing for Kyriba, and Lisa Husken, value engineer at Kyriba, discussed the current and future state of strategic cash forecasting. When exploring the data, one key point became clear—APIs are the key to more accurate cash forecasts.

How Forecasting Has Changed

Prior to the pandemic, many organizations with high idle cash balances might not have prioritized forecasting, Husken noted. However, once the pandemic hit, as well as other issues that followed like supply chain disruptions, even cash-flush companies quickly saw the important role forecasting played in their liquidity strength.

Risk management has also become more of a focus in the pandemic era as macroeconomic factors impacted FX, interest rates, the supply chain, and inflation. This prompted a shift from organizations generally producing one cash forecast to looking at multiple scenarios for cash and liquidity. “The ‘what-if’ scenarios became increasingly important,” Stark said. “It’s not like they didn’t happen before… but everyone became intrigued by [scenario planning] come 2020.”

Data-Driven Decision-Making

Given the focus on risk and the necessity to explore multiple potential scenarios, today’s treasury functions are focusing heavily on data-driven decision-making. Organizations have more data than ever before, and they need real-time access to it in order to make strategic decisions. And the only way to facilitate that is through APIs; “You can’t become more data-driven without actually having integrated platforms with APIs,” Stark said.

While many organizations view APIs as connectors that allow companies to access their banks and real-time payments, they have much greater potential. They have the ability to unify data, bringing information together into one, composable system, Stark explained. They can take a company’s system of record (the ERP), merge it with a treasury management system, and also bring in data sets from other internal and external sources, such as purchase requisitions, purchase orders, invoices, sales forecasts, etc.

With such expansive capabilities, it’s plain to see why APIs are the perfect tools for forecasting. A survey of over 800 finance executives by IDC and commissioned by Kyriba revealed that 88% of them are prioritizing APIs this year. That’s because CFOs understand that APIs can unify forecast data across their organizations so that they can make better decisions. They are demanding more precise cash forecasting and liquidity planning.

And they are right to demand it, because at the moment, they don’t have the insights they need. The survey also revealed that currently only 15% of finance leaders leverage real-time data to drive insights, and only 25% of finance teams reliably forecast cash and liquidity beyond one month.

Husken noted that those two data points go hand in hand. Reflecting on her previous role as a treasury practitioner, she noted that once forecasts go beyond 4 weeks, their accuracy tends to be 50% at best. “If you don’t have access to that real-time data, then you’re not utilizing the most up-to-date information,” she said. “Then how could you be as accurate as you could be going out further than four weeks.”

Better Forecasting Rewards

Improving the forecast would provide treasury and finance teams with more confidence to capture higher yield, which is desirable in a rising interest rate environment. With the insight strong forecasting provides, some Kyriba clients have been able to decrease the amount of cash they commit to working capital on a both short-term and a long-term basis and divert it to higher-yielding activities.

For example, through improved forecasting with Kyriba, Health Care Service Corporation (HCSC) was able to reduce working capital holdings by nearly $4 billion. The health insurance company was then able to make more strategic investment decisions earlier in the day, resulting in a 5% increase in investment returns. Short-term returns grew by $40 million, while long-term returns have seen an increase of $140 million.

Looking ahead, treasury teams may reap even higher rewards as interest rates increase. The culmination of data that APIs facilitate will create better forecasts, enabling organizations to put cash on the balance sheet to the best possible use. Borrowing will get more expensive as interest rates increase, but APIs can vastly enhance the decision-making process.

Listen to the full webinar here. And for even further insights, download the AFP Treasury in Practice Guide, Treasury Opportunities in Strategic Cash Forecasting.

Central Banks Digital Currencies: what may it bring for banks?

18-05-2022 | Carlo de Meijer | treasuryXL | LinkedIn |


The future of money is digital, according to a new global CBDC index from Price Waterhouse Cooper (PwC). This year’s Index shows that central banks are “ramping up” activity in the digital currency space. It is estimated that more than 80% of central banks worldwide are considering launching a central bank digital currency (CBDC), which some have already done so.

Before introducing their CBDC there are however many challenges and considerations to cover, ranging from cybersecurity and privacy concerns to the impact on financial markets and legislation. But the most fundamental one is: what may CBDCs bring for banks? Should they worry or is this an opportunity for them?

Introducing CBDCs may pose potential risks to the banking sector. How are central banks acting to mitigate those risks. What design is most suited for banks? And if well designed how would the future of banks look like.


Challenges and risks for banks

Despite having potential advantages, there are also various risks associated with CBDCs that could harm financial stability if not well designed. According to research, risks to financial stability depend on the take-up or rate of adoption, of a CBDC as well as bank funding, lending and resilience. If take-up is too fast, it could throw the existing financial and banking systems out of balance, a recent BIS report says.

Banking system disintermediation
The question of whether – and to what extent – CBDCs could pose risks to financial intermediation is central to the present debate. With the ability to provide digital currency directly to its citizens, it is widely viewed that if not well designed CBDCs could crowd out bank deposits and payment activities, as depositors would shift out of the banking system.

Bank runs
But there is also the possibility of digital bank runs. CBDCs would provide consumers access to a safe asset that – unlike cash – could potentially be held in large volumes, in the absence of safeguards, and at no cost. In the event of a banking crisis consumers could withdraw their savings from commercial banks and put them into safer CBDCs. If a bank has problems (be they technical or financial), customers with easy access CBDC wallets could trigger a run on the bank even if the problems are temporary. Such runs could even be self-fulfilling, leading to savers reducing their bank deposits and thereby amplifying volatility in normal times too.

Increase in funding costs
And there is the prevailing fear that the use of any CBDC would require a shift of funds out of bank deposits and into digital cash. Should CBDCs rapidly replace bank deposits, they could reduce banks’ ability to lend, leading to instability in the financial system. Without bank deposits, banks won’t have the funds to issue loans that help them make money. If customers move their money from commercial banks to CBDCs then this reduction in the deposits at commercial banks could make the cost of funding loans more expensive with knock-on impacts to the availability of credit for retail and corporate customers.

Weaken balance sheet position
While customers may deem the safety, liquidity, solvability, and publicity of CBDCs to be more attractive, this may weak the balance sheet position of commercial banks. An unconstrained CBDC could potentially have an impact on the funding structure of banks, with potential implications for financing conditions.

CBDCs could thereby interfere with the way in which nowadays credit lines and deposits complement each other. This would make funding more unstable and costly, reducing a bank’s profitability. Replacing deposit funding with central bank funding could exacerbate frictions. Greater recourse to central bank credit could increase collateral scarcity. This could affect banks in asymmetric ways, with a potentially greater impact on those that rely more on deposit funding. And the impact on yields could vary across the different segments of the yield curve. Research shows that the magnitude of these effects depends on the take-up of the CBDC, which in turn hinges on design features such as payment convenience and remuneration.

CBDCs should be carefully designed

According to research by various international financial organisations including IMF and BIS most central banks are committed to minimizing the impact of CBDCs on the stability of the financial system. It is for this reason that they are moving slowly on CBDC adoption and experimenting with CBDC design to mitigate them.

It is a growing conviction amongst central banks that the introduction of CBDC should follow a set of core principles in both design and implementation, that should minimise the impact of CBDCs on financial disintermediation, system-wide bank runs and credit provision as well as limit competition between CBDCs and bank deposits.

One of these main principles is that CBCDs must not harm. In particular, they should not become a source of financial disruption that could impair the transmission of monetary policy in the euro area. For that central banks worldwide have an intense dialogue with various parties in the payments market, technology providers and the general public.


Collaborative partnership public-private sector

Introducing a CBDC is a complex process requiring appropriate resources and capacity. Banks are recognizing that the adoption of CBDCs could enhance the efficiency, resilience, and effectiveness of money flows and capital markets, but for a CBDC to be a valuable instrument, it must be part of a collaborative partnership between public and private sectors, to ensure successful adoption, or the building of additional features.

Any CBDC ecosystem should involve the public and private sectors in a balance, in order to deliver the desired policy outcome and enable innovation that meets users’ evolving payment needs. Central banks that contributed to the BIS report envision CBDC ecosystems based on a broad public-private collaboration, or a “tiered system” where the core roles are assigned to the central bank and other more public-facing roles to private financial institutions like banks.


Two-tier structure

The risks that CBDCs may pose to bank intermediation depend crucially on the choices that central banks make. Most central banks are opting to follow the current two-tier structure which places central banks at the foundation of the payment system, while assigning end-user-facing activities to financial institutions and other payment service providers (PSPs). This cooperation has proven itself over many decades.


It is key in this relationship that central banks issue the value of CBDCs and grant its authenticity, while commercial banks as well as financial services providers issue the wallets that handle CBDC and are responsible for the application. This would allow central banks to benefit from the experience of intermediaries – especially banks – in areas such as onboarding of consumers and anti-money laundering checks. And it may preserve the role of financial intermediaries in providing front-end services.

Commercial banks are the best players to take on a customer-facing role in the CBDC ecosystem and be responsible for the distribution – just as they are now with physical money. Central banks can therefor entrust financial intermediaries with distributing CBDCs, while central banks take care of macroeconomic aspects, such as money supply management and currency stability. The commercial banks are thereby responsible for services such as customer advice, lending or corporate financing. But more than that, since CBDC offers the opportunity to develop new financial products and services.


CBDC design features and tools

Careful design and policy considerations will be crucial in allowing to maximise the benefits of CBDCs and manage any unintended consequences, thereby underpinning trust in CBCDs. So it is important to undertake in-depth research regarding the tools and design features, which are found to be strong drivers of the potential demand for CBDCs, that could be introduced to limit such risks.

To be successful, CBDCs will need to add value for users, support competition rather than crowd out private innovation, and avoid risks to financial intermediation. Central banks thereby need to strike a balance so that the digital euro is not “too successful” – by limiting its use as a form of investment – but is “successful enough” – by avoiding such restrictions becoming inconvenient and by ensuring that the CBDC adds value for those using it.

CBDC Design options

The BIS report lays out a number of design options that could help control CBDC take-up and the crowding out of banks including setting holding and transactional limits on CBDCs, and considering different ways of remuneration.

There are various options available including the issue whether to pay out interest. This as a way to limit competition between their and existing bank deposits. The curbs are designed to avoid heightening the risk of bank runs and crowding out depository banks.

Another option is implementing quantitative limits. These latter are also meant to cap competition with depository banks, and can entail limits on CBDC balances that people can hold.

Not interest bearing CBDC

Research from the BIS and the IMF on the various CBDC projects world wide shows that most are not interest-bearing like cash, which makes CBDCs useful, but not as attractive for savings as traditional bank deposits, to ensure they do not compete.

If central banks issue a remunerated interest-earning CBDC it would prove to be a more attractive substitute for cash, low interest-bearing deposits or other cash-substitutes, risking rapid emptying of deposits.

Tiered remuneration
Another option would be to make remuneration on CBDC holdings less attractive above a certain threshold. Up to that threshold, CBDC holdings would never be subject to negative interest rates, ensuring that it is a means of payment that is as attractive as cash. Above that threshold, however, remuneration would be set below the main policy rate in order to reduce the attractiveness of the CBDC as a store of value relative to bank deposits or other short-term financial assets.

Soft limit
One way round this is to set a soft limit with penalties if the upper limit is exceeded: for example, a negative interest rate on all amounts above the upper limit or a penalty amount for every day the limit is exceeded. This would work for temporary balances (for example between the payment of wages and the day the rent is paid) but may not be effective in safeguarding against a bank-run.

Setting a ceiling on individual CBDC holdings
There are also a number of active CBDC projects that have put ceilings on the amount of holdings that a customer can hold in CBDC, to prevent sudden large outflows of bank deposits into CBDC, thereby mitigating undesired effects on monetary policy and/or financial stability. But such a cap would risk reducing the scale and scope of CBDC use and, its usefulness as a means of payment. To address this issue, solutions linking CBDC accounts to private money accounts could be implemented, allowing large(r) banking to be made. This would require funds in excess of users’ limits to be redirected to or from their commercial bank accounts.

Another alternative could be expiring money. Any CBDC tokens loaded onto a wallet would need to be spent within a time-period otherwise they would expire. While this could ensure that any money loaded on a CBDC wallet is for day to day spending it however could penalise people who are unable to use their wallet.

Ease liquidity conditions
Central Banks could also ease liquidity conditions, for instance by providing abundant and favourable central bank funding if required to limit strains from possible changes in the composition of bank funding.

ECB and IMF research: findings

ECB and IMF analysis suggests that the impact on the aggregate banking sector in normal times could be manageable overall, subject to safeguards. Adequately designing and calibrating CBDC safeguards could help to counteract the adverse effects of CBDCs on bank run and mitigate potential risks to bank intermediation.

All CBDCs that are currently circulating, either as official currency or through a pilot, are designed with restrictions that limit the competitiveness of CBDC versus bank deposits. By limiting the amount of CBDCs that can be held and not offering interest on them, they don’t compete with bank deposits.

A notable finding is that a CBDC could itself be used as a tool to counter the risks of bank runs. This is because it could provide real-time information on deposit flows, complementing the information on liquidity available to supervisors every day. This would enable the central bank to respond more swiftly if needed, which in turn would help to stabilise expectations by increasing depositor confidence.


How should financial institutions react

It is especially important for financial institutions to understand where central banks are with digital currencies, because ultimately CBDCs will start flowing through the payment system and start to hit bank balance sheets.

Careful consultation with central banks is critical in clarifying the business case for CBDCs, from an inclusivity, financial performance and interoperability perspective.

However, it would be wise for commercial banks to track these design features and model potential impacts on their business so that any mitigating actions, such as increasing interest rates on savings accounts or providing CBDC wallet overflow accounts, can be planned well before they are needed.


Future thinking: digital opportunities for banks

Looking at the various CBDC projects there is no need to fear competition from central banks.

The proven division of roles and tasks between central banks, customer banks and financial service providers, in which consumers are supplied and serviced in a decentralised manner, may remain intact.

In this future scenario, commercial banks may not only retain their previous role and function, they can even expand their position as service providers.

With the basic currency infrastructure delivered by central banks, this provides a driver for digital innovation. The introduction of a general CBDC may pave the way for new digital business models and additional revenue and growth opportunities.

Commercial banks can also use the introduction of a digital central bank currency to bind customers even more closely to themselves with special apps for the use and custody of CBDC and to link them with new CBDC-based customer services.


Carlo de Meijer

Economist and researcher






Fraud Check Up

17-05-2022 | treasuryXL | TIS | LinkedIn |

Fraud as a threat: Evaluate your risk!


Record high of fraud threat level: 87% of professional treasurers from companies and banks worldwide have perceived an increase in fraud threat in comparison to the year before. * Attacks on companies have intensified significantly, threatening all processes of financial transactions and payment relevant courses.

Additionally, due to the rapid change to remote work since the start of the pandemic, security strategies have undergone the greatest stress test. New and secure means are available and necessary to protect your company against rapidly evolving fraud schemes.


Is your company at risk? Find out now by answering a couple of questions.

* Strategic Treasurer – 2021 Treasury Fraud & Controls Survey Report

Marcus Evans | 9th Annual Credit Risk Modelling and Validation | 12-14 September | Amsterdam

16-05-2022 | treasuryXL | marcus evans | LinkedIn |


We are proud to announce our media partnership with marcus evans group for the 9th Annual Credit Risk Modelling and Validation conference taking place in Amsterdam on the 12th-14th of September, 2022.


12th – 14th September, 2022 | 08:30 CET

The marcus evans 9th Annual Credit Risk Modelling and Validation event taking place in Amsterdam, Netherlands on 12-14 September, 2022 will provide practical and experienced perspectives to help delegates adapt their credit risk modelling and validation strategies to the evolving environment of credit risk. This event features in-depth sessions on the optimisation and best practices in IFRS9 and IRB/AIRB spheres, maximising efficiency and accuracy in validation, implications and applications of AI and Machine Learning, integrating climate risk and credit risk in an ever-changing environment, anticipating new regulatory requirements, cleaning and structuring internal and external data, and adapting models to macroeconomic events as they occur. These hands-on sessions will be delivered by best-in-class industry professionals and cutting-edge global leaders who are uniquely equipped to pass on their expertise in this field. This event will enable banks to conquer emerging credit risk challenges in regulatory models, validation, climate risk, and ensure their increased trustworthiness and competitivity.

Special discounts available to Treasury XL subscribers! For more information please contact: Ria Kiayia, Digital Media and PR Marketing Executive at [email protected] or visit: https://bit.ly/33fHaiC

“The optimisation of these models can be significantly improved from where we are today by using more common libraries or similar tools between development and validation” Head of credit risk model validation at a global banking institution

marcus evans