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A Renaissance for Treasury and Working Capital Optimisation

by Roger Lundholm, Head of Cash Management Sales & Solutions, Nordea

After five years of financial turbulence, the dust is finally starting to settle, allowing us to draw some conclusions on the crisis. Since 2008, the world’s economic climate, the regulatory landscape, consumer confidence and corporate and banking attitudes to liquidity and risk have changed dramatically. All industry participants, including corporations, banks, governments and regulators have taken measures to prevent a similar crisis from happening again.

Central banks and regulators have focused their efforts on rebalancing the economy. Central banks have pumped large liquidity supplies into the market and pushed down interest rates to historically low levels. At the same time, regulators have introduced a range of measures to stabilise and increase resilience in the financial sector.

The banking sector has experienced massive changes and many of the assumptions that the industry was based on have turned out to be lacking. This has led to government support for their local banking community, credit downgrades and a fundamental shift in the approach to funding, liquidity ratios and key performance indicators.

Corporate impact

From a corporate perspective, the consequences of the crisis are apparent in all industries and at every stage in the supply chain. Some companies have had to make major readjustments to survive and there have been some casualties of course. But as a general consequence, managing liquidity and risk is now recognised as core to a company’s business strategy, not only as financial good practice.