Putting the squeeze on

Multinationals stand to gain substantially from a reorganization of their treasuries to a regional structure and a rationalization of the number of cash management relationships. A regional structure allows for substantial cost reductions through better liquidity management, reduced treasury teams, and lower network maintenance costs. These benefits are big: according to a recent survey by PricewaterhouseCoopers, a 1% improvement in liquidity management could improve a corporate’s share price by 120 basis points.

The strategy is not without drawbacks, as Pieter ten Bosch, cash management development manager at Shell, says: “You gain a better picture of cash movements for the region, but you inevitably lose out on local expertise.