The Nature Of Treasury Risk

Treasury Risk is defined as the risk of loss on the bank treasury activities that depend on the risk management function of the treasury itself. Generally include the role of treasury risk management such as interest rate risk in the banking book and liquidity risk.

In practice includes treasury functions of the bank's trading activities themselves, so it is excluded in the definition of treasury risk. At some banks trading activities divorced from financing activities and liquidity management. Treasury model is called the 'Corporate Treasury'.

Actual role of the Treasury (although if the treasury is not included in trading activity) depends on the business model does. Example: Treasury may also manage the risk as the exchange rate risk from subsidiaries abroad, both in the profit and loss and capital management.

So that the Treasury can manage the risks, but the discussion was:
- Interest rate risk in the banking book → form of market risk in the banking book of the most common
- Liquidity Risk
- Management of capital / Capital Management