Treasury Management Course

All about Treasury Management, (One Day)

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This Treasury Management course is for senior managers who would like to know more about Treasury. The main topics that will be covered are:

• How the Treasury facilitates core business
• The risks and how they can be measured and controlled
• Derivatives and how they are used
• The bond issuance process & all in costs
• How mortgage hedging works and some of the problems encountered
• How credit derivatives and collateralised debt obligations work & what they are used for
• Structured investment vehicles & asset backed commercial paper
• Current problems in the industry

Training will be in a workshop format. This will include a mixture of presentation and case study material. There will be time allocated for questions and answers.

Prior knowledge of Treasury is not required. Pre-course reading will be provided, it is anticipated this will take no longer than 1 hour. Course documentation will comprise the presentation.

Below is a summary of the Treasury Management course. The day has been placed in a logical sequence.

Morning

Inside the Treasury: Why banks and Societies have treasuries, how treasuries make money and add value to the core business.

• What a Treasury does
• Key terminology
• Main functions

Risks in Treasury including measurement and limits

• Interest rate risk
• Foreign exchange risk
• Liquidity risk
• Operational risk

Derivatives

• What they are
• Over-the counter markets and exchange traded products
• Restrictions placed on the Society

Interest rate swaps

• How they work
• A case study example of pricing

Bonds

• Fixed and floating rate instruments
• Why they are issued and purchased
• How the Society does a new issue including the swap hedging process
• A case study example of calculating issuance cost

Mortgage hedging

• How swaps are used
• Basis risk

Pipeline hedging

• What this risk is
• The problem with pricing it
• How you could manage this risk

Afternoon

Pre-payment risk

• What this risk is, (optionality)
• The problem with pricing it
• How you could manage this risk

Credit default swaps, (CDS)

• How a CDS trade works
• Default probability, recovery rates & credit spreads

Collateralised debt obligations

• How these transactions work including
• Collateral, ramping, issuing vehicle, (SPV), tranches, (senior, mezzanine, equity), ratings, attachment points and subordination, waterfalls, diversification, role of the manager and rating agency

Current concerns with structured products

• Complexity
• Rating agency assessment
• Liquidity
• Valuation

Covered bonds & securitisation

• What these products are
• How they work
• Why they have been used by financial institutions to secure funding

Structured investment vehicles & Asset backed commercial paper programmes

• How the structure works
• The assets and liabilities
• Objectives of originator
• Main risks for the investor & originator
• Current problems

End of workshop & review