‘All talk, no action..’ – will 2025 be the reverse?
Taking the opportunity in this final member newsletter of 2024 to reflect on the last 12 months, two things strike me:
- it’s been busier than ever
- I’m not entirely sure where progress has been made…
To be clear, the second is not a comment on the levels of engagement the ACT has achieved.
Thank you to those members who talk to us and let us know what they are working on. Through both a large number of events but also numerous bilateral ‘catch ups’ and chats that we in the Policy & Technical (P&T) team are always happy to have it’s your comments and suggestions that enable us to engage with the official sector, banks etc on your behalf so effectively. Do feel free to drop us a note anytime at technical@treasurers.org
This year P&T, in addition to their ‘regular’ work with various central banks, governmental departments and the wider financial services community, published a manifesto ahead of the general election in the UK and attended the Labour Party conference in Liverpool and further expanded our network.
So there’s been a lot of talking!
However, when it comes to developments in the markets, progress is a little harder to identify…
At times it has felt like the whole world went to the polls and many countries have had a change of government with the associated hiatus and uncertainty. Talking to treasurers during the year, many were focused on risk management, and specifically liquidity with those who needed to fund going early to minimise the risk of market shocks.
However, beyond liquidity, there’s been much talk but relatively little action – or at least direct impact on corporates – so far… but that leads into our agenda for 2025 and things you may want to put on your watch list as they may impact treasury activities.
ESG/ Sustainable Finance/Transition Finance saw a slowdown in adoption and a general fatigue for labelled solutions in 2024. As reporting regulations take effect in 2025, it will be interesting to see if the take up of labelled products increases or if sustainability and corporate ESG strategies are effectively embedded in the non-labelled products (and credit ratings). Treasurers need to be able to communicate their company strategy to banks and the debt investor community.
Accounting and tax rules continue to evolve with recent developments such as IFRS 9, 21 and the Global Minimum Tax Rate potentially all impacting on treasury activity – possibly structurally but also potentially on covenants.
Payments and cash management – at some point the implementation of ISO 20022 will filter down to corporates with all its attendant challenges and opportunities. If you are upgrading systems in 2025, ISO is definitely something to have on your radar as well as the potential impact of transitioning to T+1 in a number of financial markets – as ever it’s the unintended consequences of these developments that might prove most challenging.
Funding/ access to capital – the implementation of Basel 3.1/Endgame may impact banks’ willingness to lend; in the UK changes to the issuing rules for bonds may enable greater access to these markets, and/or additional capital available as lower denominations on bonds enable high net worth access.
Technology (specifically AI) – the jury is still out on what exactly this might mean for treasury in practice. Definitely an area where it will pay to be cautious and understand exactly who has access to any data you provide.
This is not a complete list, for example regulatory developments around the world will impact us all, but please let us know of topics you think should be on the list and we’ll add them in.
In the meantime, we look forward to working with you and on your behalf in 2025.
James, Naresh and Sarah
The P&T team (technical@treasurers.org)
