Course dates
Course overview
'Treasury Management' is designed to provide you with a comprehensive understanding of the latest strategies, techniques and tools for an efficient treasury function. The course will examine in detail the complexities of all treasury management issues whilst expanding your knowledge of the essential concepts and the inherent risks. You will analyse the intricacies of modern financial markets, enabling you to maintain control over increasingly complex interest rate and currency exposures. You will discover the latest strategies for measuring and managing risks, whilst effectively controlling funds held by your organisation.
Summary of course content
- Effectively measure and manage the performance of treasury activities
- Expand the scope of treasury positioning and trading activities
- Safely hedge against foreign currency and interest rate risks
- Develop a basic understanding of derivatives pricing and risk management
- Become comfortable with essential financial math, statistical, and analytical concepts
- Improve earnings performance through effective asset and liability management
- Understand complex risk management models and limits packages
- Budget revenues and risks
- Apply practical solutions to improve treasury accounting
- Implement treasury activities that will increase shareholder value
Methodology
Exercises and case studies will be used throughout the programme to reinforce principles learnt.
All delegates are required to bring a laptop with installation of Microsoft Excel® and with a functioning CD ROM read drive.
Who should attend this training course?
- Treasury professionals at financial institutions
- Treasury sales professionals
- FX and money market professionals
- Marketing and relationship managers
- Corporate treasurers interested in financial techniques
- Treasury operations and settlements personnel
- Accountants and auditors
- Finance directors and financial controllers
- Planning, strategy and financial services professionals
Supporting publication
DAY ONE
Introduction to treasury functions and operations
- Financial tasks within institutions and the role of treasury
- Treasury relationship with risk
- Organisation of treasury
- Location of operations
- Information sources
- Banking and other relationships
- Organisational control
- Treasury strategy and responsibilities
- Centralisation vs. de-centralisation
- Profit centres and cost centres
- Transfer pricing concepts and issues
- The role of IT and systems in treasury management
- The changing nature of treasury operations
Strategic value and treasury
- Concepts of value vs. price
- Stakeholders and shareholders
- Discounted free cash flow estimations of value
- Weighted average cost of capital
- The relationship between risk and return
- How treasury can add to value
- Forecasting cash flow and working capital
- Credit and counterparty considerations in value creation
- Optimal capital structure
- Optimal investments in working capital
Accessing funding and financing markets
- Range of financing, funding, and capital choices
- The relationship between debt and equity
- Contingent claims framework
- Dimensions of raising debt
- Understanding yield curve dynamics and impacts on financing
- Interbank and short-term funding alternatives
- Hybrid and structured debt transactions
- Roles of securitisation and off-balance sheet financing in new accounting and regulatory world
- Strategic choices in structuring debt profile
- Asset-liability management in (ALM) financing strategies
- The role of treasury in financing, funding and ALM
Treasury risk management and analytical frameworks
- Interest rate risks in treasury
- Funding and gapping in treasury
- Net interest income and market value gaps
- Duration, convexity, and other classical metrics for assessing risks
- Liquidity and currency gapping
- Enterprise risk management frameworks
- Risk management strategies and products
- Overview of the role of derivatives in risk management
DAY TWO
Managing FX risks
- Pricing FX forwards in no-arbitrage and price discovery markets
- Applications of FX forwards to risk management situations
- Analysis of market risks in FX forwards
- Risk management alternatives for FX forwards
- Factor sensitivities for FX forwards
- Probabilistic moves in factors
- Understanding volatility and its relationship to probabilistic factor moves
- Defining liquidity horizons
- Calculating and using Value at Risk (VaR)
- FX forwards and counterparty presettlement risks
- Settlement risks
- Non-deliverable FX forwards
- The relationship of FX forwards to currency swaps
- Foreign exchange options
- Pricing options in analytical and numerical models
- Market risks in FX options
- VaR in FX options positions
- Structured foreign exchange solutions
Managing interest rate risks in treasury activities
- Single period interest rate forwards
- Pricing and mechanics of Forward Rate Agreements (FRAs)
- Managing market risks in FRAs
- Comparison of interest rate forwards and futures
- The linkage between forwards and swaps
- Pricing and risk managing interest rate swaps
- Swaps as leveraged "quasi-bond" longshort portfolios
- Swap offsets and terminations
- Implications for treasury from regulatory goals of moving Over-The-Counter (OTC) FX and interest rate derivatives onto central clearing houses
- Swap quotations and conventions
- Structured swap solutions
- Interest rate options products
- Pricing and settling interest rate options
- Understanding the role of expected volatility in interest rate options pricing
- Risk management of interest rate options
- Structured interest rate risk management solutions
DAY THREE
Treasury's role in managing other enterprise risks
- Fixed rate bonds and asset swaps
- Cross currency swaps
- Managing risks in new debt issuance
- Government rate locks
- Forward start swap solutions
- Credit spread risks and possible solutions
- Tradeoffs in pre-funding vs. risk management
- Managing equity risks
- Managing commodity risks
- Protecting trade receivables against customer defaults
Major accounting issues for treasury
- The integration of FAS and IAS standards
- Major pronouncements impacting derivatives and fair value of financial instruments
- Held to maturity, available for sale, and trading accounts
- Cash flow hedges
- Fair value hedges
- Embedded derivatives and bifurcation
- Effectiveness testing
Short-term cash management investing
- Tradeoffs in liquidity, risks, and returns in investment products
- Forecasting liquidity and probability layers of investible cash
- Liquidity transfer pricing systems
- Transfer pricing objectives and best practices
- Classical cash management investment products
- Alternative higher risk-reward strategies and products
- The role of Asset-Backed Commercial Paper (ABCP) today
- Capital guaranteed market linked notes
- Capital guaranteed range notes
- Other types of investments and risks
DAY FOUR
Impact of regulations on treasury
- The design of Basel II
- The role of financial institution capital
- Different roles for accounting, regulatory and economic capital
- Minimum capital requirements
- Credit, market, and operation risk capital
- Off-balance sheet items and capital
- Constituents of regulatory capital
- The heightened importance today of tangible common equity
- Well-capitalised financial institutions' ratios
- The relationship of capital and ratings strategies
Credit-risky assets and counterparty commitments in treasury
- Credit events and credit risky assets/commitments
- Measuring expected credit losses
- Estimating probabilities of default, exposure at default, and loss given default
- Historical experience and credit transition tables
- Estimating expected future conditional marginal probabilities of default or hazard rates
- Relationship of probabilities of default and survival functions
- Uncertainty of recoveries in default situations
- Credit loss distributions and credit VaR
- Credit and counterparty risk management strategies and solutions
- Classical Credit Default Swaps (CDS)
- Applications for CDS for treasury
- Changes expected in CDS products and markets
- Relationship of CDS to asset swap positions
- Pricing CDS
- Risk management of CDS
- Structuring credit linked investments and deposits
- Portfolio credit derivatives
- Impact of correlation
- Securitisation CLO and CDO structures used today
- Liquid CDS indices and applications for treasury
Workshop summary and conclusions
- Review of important concepts
- Developing a framework for learning
- Anticipating future developments in treasury
Hilton Hotel Singapore, Singapore, Singapore
This programme takes place on a non-residential basis at Hilton Hotel Singapore. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
InterContinental Grand Stanford Hotel, Hong Kong, Hong Kong
This programme takes place on a non-residential basis at the InterContinental Grand Stanford Hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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William Allen
William Allen was previously a senior associate consultant with Seabrook Associates in Boston, Massachusetts. Prior to that he worked with J.P. Morgan in various securities and derivatives trading, arbitrage, hedging, and marketing activities in London and New York.
He pursued MBA and doctoral studies in international banking and capital markets at the Harvard Business School.
William received the Elijah Watts Sells Award and the John S. Glenn Gold Medal for outstanding performance on the Certified Public Accountants (CPA) examination while he was with Ernst and Whinney, an international accounting firm.
At the same time, he was awarded the Robert Beyer Bronze Medal for outstanding performance on the Certified Management Accounting (CMA) examination. Mr. Allen also earned the professional designation of Chartered Financial Analyst (CFA) while serving as the chief financial and investments officer of Rhodes College.
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