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Role of the Treasury Department

5 口
review team and provides it with additional information over time. This topic is
addressed in Chapter 6, Debt Management.
• Bank relationships. The treasurer meets with the representatives of any bank that
the company uses to discuss the company's financial condition, the bank's fee
structure, any debt granted to the company by the bank, and other services such as
foreign exchange transac- tions, hedges, wire transfers, custodial services, cash
pooling, and so forth. A long-term and open relationship can lead to some degree of
bank cooperation if a company is having financial difficulties, and may sometimes
lead to modest reductions in bank fees. This topic is addressed further in the Bank
Relations section of this chapter.
• Fund raising. A key function is for the treasurer to maintain excel- lent
relations with the investment community for fund-raising pur- poses. This community
is composed of the sell side, which are those brokers and investment bankers who
sell the company's debt and equity offerings to the buy side, which are the
investors, pension funds, and other sources of cash, who buy the company's debt and
equity. While all funds ultimately come from the buy side, the sell side is
invaluable for its contacts with the buy side, and therefore is frequently worth
the cost of its substantial fees associated with fund raising. This topic is
addressed in Chapter 6, Debt Management, and Chapter 7, Equity Management.
• Credit granting. The granting of credit to customers can lie within the purview
of the treasury department, or may be handed off to the accounting staff. This task
is useful for the treasury staff to manage, since it allows the treasurer some
control over the amount of working capital locked up in accounts receivable. This
topic is addressed in Chapter 5, Working Capital Management.
⚫ Other activities. If a company engages in mergers and acquisitions on a regular
basis, then the treasury staff should have expertise in integrating the treasury
systems of acquirees into those of the company. For larger organizations, this may
require a core team of acquisition integration experts. Another activity is the
maintenance of all types of insurance on behalf of the company. This chore may be
given to the treasury staff on the grounds that it already handles a considerable
amount of risk management through its hedging activities, so this represents a
further centralization of risk manage- ment activities.
Clearly, the original goal of maintaining cash availability has been expanded by
the preceding points to encompass some types of asset man- agement, risk
management, working capital management, and the lead role

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