The front office, mid office, back office, and audit group staff the treasury branch. The front office is made up of the dealers and traders. They are the first point of contact with other market players during their buying and selling transactions (dealers of other banks, brokers and customers). They answer to the chiefs of respective departments. To take advantage of arbitrage chances, they also communicate with one another. The unit in charge of risk monitoring, measurement, and analysis operates independently of the treasury unit and reports directly to the top Management for oversight. This department tracks daily risk exposures, both individually and collectively, and provides risk assessment to the Asset Liability Committee (ALCO). Accounting, settlement, and reconciliation tasks are handled by the back office. To guarantee conformity to internal/regulatory processes and procedures, the audit group independently examines/audits the treasury department's daily operations.
Arbitrage opportunities are created by pricing differences across various marketplaces for the same class
of assets. For instance, borrowing in US dollars, converting that into BDT, purchasing forward insurance
to
hedge exchange risk, and invest in BDT might all result in arbitrage benefits. But when financial markets operate effectively,
asset values
and
exchange rates are produced that forbid
arbitrage.
In Bangladesh, a large number of banks have seized the opportunity to establish their integrated treasury
operations, which are supported by
infrastructure like the Reuters/Telerate/Bloomberg System, hotlines, Dealing Boards, the Internet,
etc.,
as well as software specifically designed for integrated treasury.