Cash & Liquidity Management

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Cash Pooling in Central and Eastern Europe Concerning the opportunities to introduce or employ cash pooling, the Czech Republic ranks at the top of Central and Eastern Europe. There are no substantial problems in the form of legal or fiscal restrictions. Cash pooling, whether in the form of zero balancing, or of a notional, cross-currency or cross-border pool, is offered by all major banks.

Cash Pooling in Central and Eastern Europe

by Štûpán Rybář

Cash pooling opportunities in the Czech Republic

Concerning the opportunities to introduce or employ cash pooling, the Czech Republic ranks at the top of Central and Eastern Europe. There are no substantial problems in the form of legal or fiscal restrictions. Cash pooling, whether in the form of zero balancing, or of a notional, cross-currency or cross-border pool, is offered by all major banks. For this reason, cash pooling is a product whose popularity is on a constant rise in this country, and it is unthinkable now for the treasury department of any big national company to be without it.

Cash pooling opportunities in the Slovak Republic

As cash pooling is a widespread product in the Slovak Republic, currently used by the majority of the banks, no problems have been noted with its introduction in any form. The only restriction consists in the non-existence of the offer of a national cross-currency pool. However, despite the relative simplicity of this system, its introduction should always be discussed with the legal and fiscal expert of any company. Sometimes the SKK can be considered a drawback, because of the low volume of trading with this currency resulting from a higher spread between the bid and offer rates. This fact is manifested by the increase of cost of real cross-currency cash pooling, but this will end on 1 January 2009, when the euro will be adopted.

Cash pooling opportunities in Hungary

The offer in Hungary includes all available types of cash pooling, all of which are commonly used. Cash pooling in Hungary is most frequently employed for incorporation of affiliated companies by the parent companies based in Western Europe. Sometimes it is used by two or more entities independent in terms of capital and ownership. This co-operation enables companies to minimise their credit charges and to better optimise their liquidity.

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