Introduction to Treasury

By Dion Alken

Money is a commodity that is traded in the market just like any other commodity. Traders come together to negotiate the price of money market instruments and foreign currency, and the terms of those transactions, either on their own behalf or for their customers. In this Course, you will learn how the money markets operate and you will be introduced to its components, language and terminology. When you complete the Introduction to Money Markets, you will be able to:
• Recognize the main characteristics of the domestic and foreign money markets.
• Recognize how the Treasury manages the bank’s cash flows using the money markets.
Calculate interest rates in its various forms and recognize how money is transacted in the market.

• Language: English
• Publisher: Lulu.com
• Release date: Feb 29, 2016
• ISBN: 9781329938083

Book preview

Introduction to Treasury

COURSE OVERVIEW

Day-to-day, commercial banks are the most active participants in the domestic money market, foreign money market, and foreign exchange market. Their importance is measured by the volume of transactions they execute in these markets and how many prices they provide.

In this Treasury overview course, we introduce many issues relevant to the Treasury Department and exposure management. This course is designed to give you an overall picture of a bank's relationship to the markets and, more specifically, the Treasury Department's role in these operations. Whether or not you intend to become a trader, it is important to understand the Treasury's function and impact on other bank operations

INTRODUCTION

The purpose of this unit is to identify the role of a bank and the role of the Treasury Department within the bank. Whatever your role in a bank, it is important for you to understand the role of the Treasury and its impact on the bank as a whole.

OBJECTIVES

When you complete this Unit, you will be able to:

Recognize the role of the Treasury within the bank

Identify key factors in funds management

Define liquidity and its importance to the bank

Recognize the role of the Central Bank in controlling the

money supply

WHAT IS THE BANK'S FUNCTION?

We all know that the function of a bank is to act as a financial intermediary between investors or depositors - people with a temporary surplus of funds - and issuers or borrowers - people with a temporary need of funds. (See Figure 1-1.)