Deutsche Bank
DACT Treasury Fair 2016:
How to survive in a world
where excess cash can cost?
Introduction
Deutsche Bank is firmly committed to the Dutch market. To highlight this we will expand our Netherlands
presence with a dedicated liquidity management specialist from our Asset Management group. Following
the success of last year’s event, Deutsche Bank is glad to be back for the 2016 edition of the DACT Treasury
Fair. Being the most important platform for local treasurers, the DACT provides the ideal setting to discuss
how to manage liquidity in a new and harsher world. Preceding this event Edwin Hartog from Deutsche Bank
and Reyer Kooy from Deutsche Asset Management answered questions on the changing environment.
Edwin Hartog
Head of Cash Management Corporates Deutsche Bank in the Netherlands. Hartog has
over 20 years of experience in international cash management and treasury advisory.
Before joining Deutsche Bank in 2012 he worked for 12 years at Citigroup in different
roles, most recently as Head of Treasury & Trade Solutions Corporates Netherlands.
Hartog holds a MSc in Business Economics from the Open University Maastricht.
Reyer Kooy
Head of Institutional Liquidity Management Deutsche Asset Management for EMEA and
Asia Pacific, Global Client Group: London and Chairman IMMFA. Joined the company in
2010 with 14 years of industry experience. Prior to joining, Reyer served as Head of Cash
Sales for EMEA at Credit Suisse Asset Management and as Head of EMEA Financial
Institutions Sales for the Global Cash Business at JP Morgan Asset Management. Kooy
holds a BSc (Honours) from Aston University; Chartered Alternative Investment Analyst;
Investment Management Certificate.
What are the main market developments affecting corporates and treasurers?
Edwin Hartog: “Low interest rates and regulatory changes are the main topics at the moment, and
that’s likely to remain the case for years to come. This makes liquidity management a central theme for
all our clients. It was less of an issue in the past, when surplus cash could easily and confidently be
placed in plain-vanilla deposits that always generated an acceptable yield, but the new reality is that
you might end up paying if you want to store your excess liquidity. This makes liquidity forecasting and
strategy far more important.”
Reyer Kooy: “Ultra-low yields undoubtedly represent the main issue
facing corporates right now. The rate situation and evolving regulations
have changed the game, and the fact is that it has become harder to
find a return for excess liquidity. Treasurers need help navigating this
new environment, and banks and asset managers need to adapt and
ensure they have the right solutions to help. We have made strong
progress on this already.”
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“Banks and asset
managers need to adapt
and ensure they have the
right solutions to help”
Deutsche Bank
How should treasurers operate differently in response to this new reality?
Kooy: “It demands a different level of sophistication and cash management. It’s vital to consider how much
cash you want at your immediate disposal, what percentage you should store away for the medium term and
what you should do with your long-term reserves. This brings a new dimension for treasurers, banks and
asset managers.”
Hartog: “Indeed. What is really required is a shift in outlook from all the parties involved. Treasurers need
better information about their liquidity to avoid possible bleeders. At the moment, for instance, you don’t
want surplus cash in specific currencies, as you might actually lose money that way. You need a solid
forecast of your different liquidity positions. Banks are much more
restricted than they used to be, and they have less freedom to offer
“Banks used to rate
solutions in the current landscape. This changes the way a treasurer
corporates,
now treasurers
looks at a bank. It used to be that banks rated corporates, but now
are rating banks”
treasurers are rating banks.”
How can banks and asset managers support treasurers in this constantly changing environment?
Hartog: “Deutsche Bank wants to be a partner for treasurers in managing their overall liquidity strategy.
It’s essential to have a clear and up-to-date view of your liquidity positions, and we can assist in this regard
– for instance, through the dashboard Deutsche Bank has set up. This dashboard gives treasurers access to
strategic and tactical financing tools as well as information and analysis tools. For them, this means the
ability to not only better determine liquidity positions, but foreign exchange exposures and investment
opportunities as well. The bottom line is that you need to know where your cash is and which cash is
generating what return – and you need to know that at all times. It might sound basic, but it’s very important
in a world where cash might cost you money. Banks need to bear all this in mind and transform their offering
accordingly. Banks and treasurers should gather more in-depth information about each other as well. With
full information about client’s business models, we can offer more specific solutions in response to the
changing times. Ultimately, that’s what it’s all about: knowing your client.”
Kooy: “Our principal aim is to help clients as they seek to outsource the liquidity management challenge.
For example, we can assist them with investments in specific money market funds. We have an AAA-rated
money market fund that has grown tremendously and offers treasurers great flexibility. The growth of our
Euro fund, even when it yields negatively, is indicative of a new reality. Treasurers holding Euros accept that
to keep cash ultra-liquid and ultra-safe comes at a cost. Indeed, Money Market Funds are set to become even
safer and even more liquid, as dedicated regulation comes into force in America and continues to be
developed in Europe. So, as a tool in the treasurer’s tool-kit, Money Market Funds are likely to remain very
important.”
More information:
— Deutsche Bank Whitepaper: Liquidity Management. Thriving in a new world.
Please don’t hesitate to get in touch with us or with your regular Deutsche Bank contact to discuss liquidity
management in more detail.
[email protected]
[email protected]
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