Cash & Liquidity Management
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German Treasury Feeling the Pinch

Corporates in Germany are facing similar problems to their counterparts across Europe, with liquidity and risk management becoming priorities, says Jens Mikolajczak, Head of Cash Management Corporates Germany in Global Transaction Banking at Deutsche Bank

How has the economic crisis affected corporate cash management in Germany?

The ongoing turmoil has led corporates across all industry sectors to rethink their cash management arrangements. Of course – and these issues are not unique to Germany – credit supply has become extremely pertinent as some banks are withdrawing from certain business areas and some have disappeared altogether.

With short term funding in the capital markets becoming difficult, corporates are looking to other methods of securing working capital.

So “back to basics” has been a key theme: many treasurers have refocused on their core role of maintaining day-to-day liquidity and ensuring that the company can continue to do business. However, this has also meant a renewed emphasis on squeezing efficiencies from the most basic processes by, for example, expediting collections and extending payment terms. A further repercussion has been that the treasurer’s role has become much more prominent in many organisations. These trends have resulted in the Boards of many corporates seeking advice and support from transaction banking practitioners.