THE NUMBER · THE BANK · FUNDING AND LIQUIDITY
A bank holds US$3bn of assets it could sell within days at little loss. In a severe stress, it estimates US$2.4bn of its funding would leave within 30 days.
// ← EVERY SEATTHE FUNCTIONS
Every floor · The machinery
Treasury Analyst
Funds the bank and manages the interest rate and liquidity risk created by its own balance sheet.
BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// 01 — WHAT A TREASURY ANALYST DOES
Deposits, wholesale funding, the maturity profile and the internal price the businesses pay for money all sit here. It is the seat that decides what a loan actually costs the bank to make, which makes it quietly influential over what the front line can price.
// 02 — WHO ARRIVES HERE
From markets, finance or risk, and through graduate streams; quantitative comfort is expected.
// 03 — WHAT THE INTERVIEW ASKS
These are the shapes the round takes, not a question bank — banks phrase them differently and the wording is never the point.
- 01Why does a bank need funding when it takes deposits?
- 02What is transfer pricing for, and who complains about it?
- 03Rates move 100 basis points. What happens to this balance sheet?
- 04How do you think about the maturity profile of our funding?
- 05What would you watch in a stress?
- 06Where does the bank's margin actually come from?
What the panel is listening for. Whether you can hold the whole balance sheet in view and connect a funding decision to something a customer will notice.
The finance, technology and operations quiz has no question for this seat yet. Its five were asked for the software engineer, financial accountant, operations analyst, procurement manager and people partner seats, in the same block, and the temperament they score is the one this panel scores too.
Take the quiz →// 04 — ONE QUESTION, WORKED
QWhy does a bank need funding when it takes deposits?
A strong answer explains that deposits are funding — usually the cheapest the bank has — but short and free to leave, while the loans they fund run for years; the mismatch is the bank's business and one of its central risks. So the bank needs term wholesale funding to lengthen the profile, a buffer of liquid assets for the day deposits move, ratios a regulator sets for both, and an internal price that charges each business for the funding its assets consume. It ends with what the customer notices: the loan's price, and the day the bank cannot lend.
A weak one says the bank needs funding to lend more, and cannot say what a maturity mismatch is or why anyone regulates it.
The seat is judged on whether you can hold the whole balance sheet in view and connect a funding decision to something a customer will notice. Treasury sets what a facility costs before any margin is negotiated; the lending desk prices the risk it has read on top of that, and understanding that read is what lets treasury and the lending desk argue about the same thing.
START HERE · How to write a credit paper
THE IN-TRAY · ONE MINUTE
Make the call on one file.
A short file on the ground this page covers. Every option opens with how far it sits from a senior banker’s read.
1 FILES · PICK A CALL ON ANY OF THEM
3 MORE ON THE BANK · FUNDING AND LIQUIDITY →WHERE DO YOU READ FROM? THE PLACEMENT →
// ALSO IN THE FUNCTIONS
- Financial accountant
- Product controller
- Regulatory reporting analyst
- Software engineer
- Cyber security analyst
- Data scientist
- Business analyst
- Operations analyst
- Legal counsel
- People partner
- Marketing manager
- Procurement manager
The whole board, and how the four blocks fit together, is on what jobs banks hire for.
// SUBSCRIBE
The Lab.
One case file and one question, in your inbox every Tuesday morning, New Zealand time. The senior banker's read opens only after you answer.
FREE WITH IT · 10-PAGE PDF
Case 01 of the interview case pack — Northmark Engineering, in full.
No spam. Unsubscribe anytime. Educational content only.