Liquidity Day 11: The Treasury Function Explained - How Banks Manage Liquidity Daily
22 March 2026·12 min
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In this session of the Liquidity Management course from The Industry Portal, we move into the operational heart of liquidity risk management: the Treasury function. While previous sessions focused on frameworks, ratios, stress testing, and contingency planning, this lesson explains how liquidity is actually managed in real time, day by day, inside a bank.
This session provides a clear and practical overview of what Treasury does, why it is central to bank stability, and how it operates within the wider Risk and Finance ecosystem. You will learn how Treasury manages cash positions, funding flows, and liquidity buffers, ensuring that the bank can meet its obligations in the right currency, at the right time, and in the right place.
We begin by explaining Treasury’s core mandate and responsibilities, including liquidity buffer management, intraday liquidity control, funding execution, and access to central bank facilities. The session shows how Treasury monitors high quality liquid assets, ensures buffer usability, and prepares monetisation strategies so that liquidity can be mobilised quickly under stress.
A major focus of the lesson is daily cash and intraday liquidity management. You will learn how Treasury oversees payment flows, settlement obligations, and central bank balances, and why intraday liquidity has become increasingly important in modern banking. We also explore how Treasury manages real time pressures, avoids payment disruptions, and coordinates closely with operations teams.
The session then turns to funding strategy and execution. We explain how Treasury plans the bank’s funding profile across instruments, tenors, and currencies, and how these plans align with regulatory requirements such as the LCR and NSFR. You will see how Treasury executes funding transactions, manages rollovers, and optimises funding costs while maintaining resilience.
We also examine Treasury’s role as the internal bank through funds transfer pricing. The lesson explains how Treasury allocates liquidity costs and benefits across the organisation, shaping business behaviour and aligning commercial decisions with liquidity strategy and risk appetite.
The interaction between Treasury, Risk, and Finance is explored in depth. You will understand how Risk provides oversight and challenge, how Finance supplies forecasts and reporting data, and how all three functions come together in ALCO, ILAAP, stress testing, and recovery planning.
External relationships are another key theme. The session explains how Treasury engages with central banks, regulators, investors, and market counterparties, and why strong communication and operational readiness are essential, particularly during periods of stress.
Technology and operational resilience are also covered. We discuss the systems Treasury relies on, including liquidity dashboards, forecasting engines, collateral management platforms, and reporting tools, as well as the importance of resilience planning, back up arrangements, and crisis readiness.
By the end of this video, you will have a clear understanding of why Treasury is often described as the control room of liquidity management. It is where strategy meets execution, where risk becomes operational reality, and where banks either stay liquid or fail. This session sets the foundation for the next lesson, where we explore funding markets and the instruments banks use to raise and deploy liquidity
bank treasurytreasury functiontreasury managementliquidity managementliquidity riskbank liquiditycash management bankingintraday liquidityliquidity bufferhigh quality liquid assetshqlafunding strategy
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