Any economic activity, or practically any activity for that matter, needs to be funded somehow. The parallel between these funds, or cash, and the blood in an organism has been abused at great length but it remains a powerful one. While we are used to the idea of corporations or governments raising cash for investments, we are less familiar with the idea of financial institutions doing the same. When we study finance, and in particular the derivatives world, we often assume that the money used for these transactions is basically already there. This of course is not the case since financial institutions need to raise the liquidity they subsequently use to finance derivatives transactions. At the center of the operation of raising funds is the treasury, a specific desk or unit in an investment bank or a separate division in the case of a corporation.

Funding, through the action of borrowing, is intimately connected to the concept of credit and since the financial crisis of 2007 to 2009, credit has been a central topic in any financial discussion. When discussing financial theory at a more or less quantitative level, the cost of funding has never entered as a deciding factor. Now (as it is elegantly described by Piterbarg 70) this can no longer hold true.

There is a fair amount of literature covering treasury operations, but none that addresses the need of understanding at the same time the role of a treasury desk ...

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