European treasurers face regulation, rising geopolitical risk and a changing market landscape. They want banking partners that can help them deal with this complexity. Only the best treasury and cash management banks can walk that road successfully.

Author: Denise Bedell

The year 2016 was one of great change and volatility for companies in Europe—and 2017 could bring even more uncertainty. Last year was the year of Brexit, when the UK voted to leave the European Union. Ahead is a time of great economic and political uncertainty in the EU. Last December, Italy’s youngest-ever prime minister, Matteo Renzi, resigned after a failed referendum on his vision to reform the country’s political system. Also toward the end of last year, the US elected a new president, who has voiced anti-EU sentiments when it comes to defense, trade and business cooperation.


As Anil Walia, EMEA head of supply chain finance at Deutsche Bank, notes, “This year is witnessing disruptive changes that may affect the long-term business models of our clients.”


Walia says it is important to remember how much wider the responsibility and influence of the corporate treasurer has become. “The treasurer’s role touches core business activities, such as marketing, sales, production and procurement, in addition to overseeing daily financial stability. Regulatory changes on the one hand, volatility of global business on the other, will continue pushing this evolution toward a more-strategic, decision-making role.”

Indeed, European treasurers and their banking partners had a raft of regulatory, economic and operational worries to keep them busy in 2016—and that is likely to continue in the year ahead.



The launch of stricter capital provisions for banks under Basel III, making it increasingly unattractive for them to hold short-term deposits, makes it even more challenging for corporate treasurers to manage short-term liquidity. Then there is the second incarnation of the Markets in Financial Instruments Directive (MiFID II), which takes effect in January 2018. MiFID II imposes strict clearing and collateralization requirements for over-the-counter derivatives. For corporations, this will particularly affect commodity derivatives used for hedging risk.


On the tax front, companies have been preparing for major changes under the International Financial Reporting Standards. Although they don’t take effect until the start of 2018, the new rules under IFRS 9 require financial instruments be recognized at “fair value,” which means using observable market rates as key inputs. IFRS 9 also includes more-stringent requirements for independent data demonstrating intercompany loans have been made at arm’s length, “rather than relying on bank rates or the parent’s credit rating,” note Thomson Reuters analysts writing in Treasury Management International.


The Payment Services Directive 2 is also a key concern for corporate treasurers in the European Union. The PSD2, which entered into force in January 2016—EU member state legislatures have until January 2018 to implement it—aims to create a level playing field for all payment services providers (both bank and nonbank players) and make it easier for customers to access banking information—either via their banks or third-party data providers.


Given these market changes, it is hardly surprising that data and analytics are high on corporate treasurers’ priority list. Dick Oskam, global head of transaction services sales at ING in the Netherlands, notes that treasurers are interested in how their operations can benefit from data analytics provided by banks. “This is not only important for improving customer service, but also for preventing fraud, improving operational processes, reducing risks and generating services that go beyond traditional banking,” he says. 


Western Europe

Best Overall Bank for Cash Management


Best Bank for Liquidity Management

Societe Generale

Best Provider of Short-Term Investments/Money Market Funds

Deutsche Asset Management

Best Bank for Payments and Collections

ING Wholesale Banking

Best Bank for Working Capital Optimization

Deutsche Bank



No comments yet

Add a Comment

You must be a registered user with Global Finance Magazine to comment.

Forgot Password?