Question Enn Finance & Economics

Discuss the role of treasury function for the success and survival of an organization under financial and non-financial institutions

Discuss the role of treasury function for the success and survival of an organization under financial and non-financial institutions

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Answer Internal Staff

The treasury role includes the following: to conduct forecasts, ensure proper investment and risk management, advise management on working capital levels, ensure that cash management is in order, maintain bank relations and raise funds.

Specifically, the treasury department plays a critical role in a bank/financial institution. The department is responsible for balancing and managing the daily cash flow as well as managing the liquidity of funds within a bank. The treasury department deals with the bank's investments in securities, foreign exchange, asset/liability management as well as cash instruments. Furthermore, the treasury liaises with the bank's regulating bodies.

This is all important to ensure that the bank is financially stable so that it can function and serve its clients. It must also be noted that, liquidity and capital requirements of banks have become an important element since the banking crisis therefore the treasury department has an important responsibility to ensure that banks can survive any future crisis in the industry. As can be seen above, the treasury department plays a key role in an organisation’s (whether financial or non-financial) success and survival by handling the company’s day to day (financial) activities.