Organisation Structure

Generally the Treasury Organisation is divided in to two parts:
 

Front Office is mainly responsible for managing Assets and Liabilities of the bank, it includes activities like trading in bonds, currencies, financial derivatives and also encompasses the associated financial risk management. Bank Treasuries may have the following departments:

• Fixed Income or Money Market desk that is devoted to buying and selling interest bearing securities
• Foreign exchange or "FX" desk that buys and sells currencies
• Capital Markets or Equities desk that deals in shares listed on the stock market
• Derivative Market desk that deals in interest rate and structure derivative products
• Asset liability management or ALM desk that manages the risk of interest rate mismatch and liquidity
• Proprietary Trading desk that conducts trading activities for the bank's own account

Back/Mid Office is responsible for Accounting, Valuations, Processing, Settling, Confirming and Reconciling the transactions completed in the Front-Office.
 

 

Treasury Department in a Bank

The main functions of a treasury department in a bank to manage asset and liability of the bank, which includes forecasting net interest income (NII) and measuring the bank's interest rate risk (IRR). The statistics generated by the department are typically fed to the bank's Asset and Liability Committee (ALCO), this committee is responsible for establishing guidelines for risk taking and balance sheet funding. The treasury department generally performs other related functions, such as managing the bank's reserve and risk capital requirements, funding the bank's balance sheet.

There are other functions often housed within the treasury department, including a process known as Transfer Pricing. At a high-level, the TP process centrally manages the funding requirements of the entire bank in lieu of having each division fund its own balance sheet.