Cash & Liquidity Management

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Cash Management in Central & Eastern Europe With consistent year-on-year growth this century exceeding that of many western economies, Central & Eastern Europe (CEE) has become a vital region for many multinational companies as both a consumer market and sourcing location. Many are choosing to locate a shared service centre in CEE and domestic companies are devel- oping their own international markets. With both euro accession and SEPA on the horizon, we look at some of the trends and opportunities in cash management in this economically vibrant region.

Cash Management in Central & Eastern Europe

by Günther Gall, Head of Transaction Services, RZB

With consistent year-on-year growth this century exceeding that of many western economies, Central & Eastern Europe (CEE) has become a vital region for many multinational companies as both a consumer market and sourcing location. Many are choosing to locate a shared service centre in CEE and domestic companies are developing their own international markets. With both euro accession and SEPA on the horizon, we look at some of the trends and opportunities in cash management in this economically vibrant region.

Cash pooling

Multinational companies have identified CEE countries, such as Poland, Czech Republic, Hungary or Slovakia in particular, as a significant region for shared service centres (SSCs) with skilled staff, multi-lingual capabilities and good accessibility to other parts of Europe. In turn, this has helped to drive the development of domestic companies and overall economic growth. However, while cash management techniques such as cash pooling across CEE countries are increasingly sought-after, there are still obstacles to cross-border cash pooling despite the harmonization of the different regulatory and legal frameworks in each country (see box 1). By working with a bank experienced in the regulatory intricacies in each market, however, there are ways of achieving high levels of concentration or pooling with the respective benefits in interest return and cost of borrowing.

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