Nothing to fear

Published in The Treasurer

Establishing banking arrangements in an emerging market may seem a daunting prospect, but it’s easier if you know what to expect, says Sally Percy

First the good news. Your company, a manufacturer of market-leading widgets that are radically transforming the lives of consumers around the world (insert more effusive marketing speak as applicable) has just opened a subsidiary in an emerging market. You have never seen the CEO this excited since you started at the organisation as a lowly treasury analyst some 15 years ago. Double-digit growth is virtually assured for the next decade, he tells the (somewhat disbelieving) workforce assembled for the usual quarterly update meeting. And the share price is about to go through the roof.

Now for the bad news. The new subsidiary will need bank accounts, FX services and to
be able to move money across borders and repatriate it to the centre. Did the CEO think of these matters before he formed the subsidiary? Was treasury even consulted on the strategic plan? Not this time, unfortunately, and it’s down to you to make the best of a potentially bad situation. So what do you do? Well, if ever there were a situation that required you to reach for your copy of The International Treasurer’s Handbook, then surely this is it.

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