The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Treasury: The case for centralization

Corporates are well aware of the benefits of treasury centralization. So why have many eschewed this approach to treasury management?


Relatively few treasurers can claim to have completed a programme of centralization and fully realised the benefits.

The challenge appears to be most acute among organizations with a decentralized organizational structure, while multiple systems and fragmented data are among the most common impediments.

“Some organizations that have traditionally worked in a decentralized way have perceived that centralizing treasury operations might create conflicts between the corporate headquarters and the subsidiaries,” suggests David Moya, senior manager at treasury management consultancy Zanders.


Additionally, centralizing treasury operations involves entering into intercompany relationships such as intercompany loans or cash-pooling structures, which must be priced on an arm’s length basis to comply with the base erosion and profit shifting (BEPS) regulation.

These transfer-pricing calculations are complex and need to be accounted for transparently and properly, which requires extra attention from already overworked treasury and tax teams.

Other reasons why multinational businesses may choose to maintain local operations include local regulations on the flow of capital and taxation.

Naresh Aggarwal, Association of Corporate Treasurers

“With increasing focus on BEPS, having a local presence helps ensure there is sufficient local staffing levels,” says Naresh Aggarwal, associate director, policy and technical, at the Association of Corporate Treasurers.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree