Netting and cash pooling are established liquidity management techniques used by many multinational corporations around the world. The availability of both techniques has changed in recent years as banks have altered their propositions, regulations have been liberalized and technology has enabled more benefits to be gained from each process. More recently, technology change, in particular, means that more companies can operate in-house banks, enabling them to perform these core activities more efficiently and giving treasurers more visibility and control over group cash and risk exposures.

The new CTC Guide, the latest in the series on Global Interconnectivity, focuses on techniques that can improve the use of liquidity across a multinational organization. It examines the core liquidity management techniques of netting and pooling and identifies how to determine their appropriate use. It looks at ways in which companies can extend their use of these techniques to improve efficiency and to better understand and therefore manage risk, focusing on the use of in-house banking to centralize control of both netting and pooling.

The guide explains that there is no single “best” solution for any company. Rather, treasurers have to identify how best to use solutions to meet their own particular needs and requirements. As with any other project, treasurers will need to evaluate the benefits in relation to the costs of implementation and any other operational costs.

Download "Global Connectivity: Netting, Pooling and In-House Banking."
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