9 Short-term investorslike fiduciary clients, central banks and money market funds, are willing to place fiunds with Rabobank. has a good liquidity position on FUNDING Marco Roddenhof: Fair price One of the greatest challenges currently facing financial institutions is the continuing rise in the cost of borrowing money. Although this is partly because the government- backed banks have re-set the base for the pricing structure, Gower also believes it is down to risk being priced at too low a level over the last three or four years. "However, I think it's clear that the market now knows this to its detriment. Will we ever return to that point? I doubt it." One of Gower's internal clients - Jacque Buysse - agrees. As the man who receives the long-term funds from Gower and distributes them to the entities within Rabobank that require them, Buysse realises that there is a need for Rabobank to play the good cop/bad cop routine. "Although it can be difficult, we have to convince clients that there is a reason why they have to pay as much as they are paying for funds. If they complain, ask them to look around at what is on offer in the market. Look at what happens to banks that are not as strict as Rabobank. The financial community is in the process of learning that risks have real prices attached, and it is the choice of the banks to decide whether they want to pay those prices themselves - and pass on the discounts to their clients - or whether they want to do fair deals with their clients and offer real market prices. We have to accept there's a price to be paid for risk." Buysse's role includes fully hedging currency and interest rate risks, and optimising liquidity management. Working for Group Finance, his counterparties include account managers in Utrecht, Rl and Group affïliates such as De Lage Landen (DLL), FGH Bank and Bouwfonds. He tries to ensure that there is awareness within the Group about the costs of internal switches - for example, from one currency to another or one maturity to another. "When you are convinced (internally) about the real cost of funds, you can also convince clients that the price they are being asked to pay is fair." "We have to introducé transparency to the sort of risks we run - in other words, providing short-term and long-term liquidity. In the past, products granted to clients - not loans, but facilities to take funds over say five years - were offered based on three-month Euribor rates. But when we give these facilities, we are binding ourselves to five years liquidity. So the challenge for me is to make clear that we have to translate these sorts of issues into rules. In other words, when we give these facilities, clients pay a liquidity premium - if it's five years, then they get it at three-month Euribor plus 80 basis points. The idea being that the facility is not Euribor flat, but has a cost attached." Dick Klaasse and Marco Roddenhof both work at Global Financial Markets (GFM). Thijs Berenst, Jacque Buysse and Michael Gower work at Treasury Rabobank Group (TRG), part of Group Finance. Group Finance manages the overall liquidity of Rabobank Group. The TRG executes the Group Finance policy. GFM manages the short-term liquidity. Over the coming period, GFM Treasury will establish three corporate centre service desks in America, Asia and Europe respectively; Rabobank International Corporate Centre Services (RICCS). The managers of these RICCS's wiil be available to provide prices and assistance to the regions and relationship managers so that they will be in a better position to observe their relevant funding costs. The RICCS desks will also be available to relationship managers to answer their questions in regards to the policy. RICCS' primary function is to make long term funding available to Rabobank International clients so that assets can be match funded. ISSUE 18 THE WORD

Rabobank Bronnenarchief

blad 'RI The Word / The Word' (EN) | 2009 | | pagina 34