Opening Markets Still Face Closed Doors

The promise of better liquidity management is still in the wings, until banks fully embrace free trade accords on services.


Asean-based corporate treasurers face four basic themes in their daily challenge to grow their regional cross-border businesses, says Farooq Siddiqi, global head of product management for transaction banking at Standard Chartered Bank.

“At first they ask, where do I find growth?” says Siddiqi, talking to Global Finance at SIBOS, Singapore. “Then their attention turns to how do I look at risk holistically? Is liquidity adequate—am I exposed. And finally, how do I respond to the changing regulatory environment in Asean—where are the opportunities, as well as the risks?”

Siddiqi’s view aligns with a study released by Bank of America Merrill Lynch at SIBOS. The study, “Asia Pacific Treasury in Transition,” concludes that treasury in the region is evolving toward a core strategic function among corporates, meaning that an optimized treasury is now considered a competitive advantage among expanding companies in the region.

Likewise, the study finds that liquidity management is of greater concern among corporates. It also says that treasurers now see opportunities amid the changing regulatory scene in the region to improve liquidity by freeing up trapped cash.

Asean banking regulation is in fact poised for change. Under a framework agreement established in March 2015—part of the Asean Economic Community, which kicks off in 2016—banks within the 10-member Association of Southeast Asian Nations can sign reciprocal bilateral deals to operate in a partner country on the same terms as domestic financial institutions.

Like all such agreements, banks will have to overcome other barriers associated with free trade; the suspicion that reciprocal access to markets will prove too robust a competitive challenge.

At the moment, a real scenario of freed up cash is still dependent on the banks themselves throughout the region buying into freer trade in services.