Cash & Liquidity Management

North America Perspectives: Foreword Bank of America Merrill Lynch's Head of Global Corporate Credit and Transaction Banking provides a foreword for this special supplement, as well as an overview of the contents within.

North America Perspectives: Foreword


by Paul M. Donofrio, Head of Global Corporate Credit and Transaction Banking, Bank of America Merrill Lynch

This special supplement, sponsored by Bank of America Merrill Lynch, is published at an opportune moment. For the second year in a row, CFOs interviewed for our annual CFO Outlook study show growing optimism about the US economy.

Over half of those interviewed expect the economy to expand in the coming year and 63% forecast sales growth in their own companies. While most of these mid-sized companies are looking to domestic markets, more than one third expect some of that growth to come from outside the United States.

This is good news for business, and good news for those banks, such as Bank of America Merrill Lynch, who have continued to invest in building the technology, expertise and global reach to help American corporations grow successfully around the world.

As growth returns, the relationship between banks and corporate treasurers is changing. It might be tempting to imagine that transaction bankers and their clients should simply press the ‘reset’ button and go back to the way we worked before the global economic crisis, but that is neither possible nor desirable.

For the past seven years, banks and corporations have been cautiously navigating their way through a transaction banking paradigm shift, towards a future in which the quality of a banking relationship counts as much as its size. This shift, ushered in by the changing regulatory environment, has not reached its equilibrium.

A dramatically changed regulatory and industry environment, combined with new technologies and products, has the potential to reshape the industry in terms of how banks provide liquidity, visibility and control so that clients can better manage, protect, collect and move their money across the globe.

For banks, a key catalyst for this change has been increased capital buffers and new regulations that increase the costs of providing basic lending and depository services. As a result, corporate treasury teams may need to reduce the number of bank providers they retain as the true costs of operating multiple accounts with multiple providers are exposed.

Our pledge is to be a trusted advisor to the clients we serve, able to call on whatever bank resources are required to best serve the client’s need. That may mean some of the lines that have traditionally separated transaction services from other banking activities are crossed. Clients need banks to speak and act with one voice, delivering advice and service seamlessly across vast product capabilities.

This move towards greater integration of banking services mirrors changes in the corporate world, where the overlaps between treasury and other departments, such as procurement and operations, are offering fertile ground for greater efficiencies. Underpinning this co-operative way of working is a revolution in technology.

Moreover, Bank of America Merrill Lynch is able to place the experience we have gained in working with thousands of global corporations in territories across the world at the disposal of every client. It is our global footprint that allows us to develop the deep in-house expertise on which our clients rely.

Nowhere is this truer than in the constantly shifting landscape of regulation. Our detailed, current knowledge of local regulations, especially in the faster-growth, higher regulated economies in Asia, is helping our clients enter new markets with a clear understanding of the regulatory environment they will face. A good example is Rita Cook and Ana Diaz’s article on expanding into Latin America.

So, as we enter a new era where partnership and depth of relationship is the driver of success, our North America Transaction Services team, led by Dub Newman and Galen Robbins, set the stage in this supplement. Fiona Deroo explains how leveraging a global overlay bank can help manage your cash position, Paige Chesser and Drew Strzepek examine the strategic role of the treasurer, Stephanie Wolf takes a close look at regulation, while Liz Minick, Rodney Gardner and Mandana Singh present a case study on Mattel.

The future for treasury looks fascinating: I hope you find this supplement a useful guide.

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