Arjan Hes, Head of European Sales (TreasurySpring): I’m Arjan Hes, also known as AJ by Glenn. I owe my career to two bank collapses, BCCI and Barings. I was introduced to the concept of institutional money market funds in the early 1990s. During the global financial crisis, I witnessed a billion-dollar loss in a money market fund on balance sheet. After a stint in technology, I joined a fintech to return to the ultra-conservative end of cash management. Treasury Spring provides cash managers and corporate treasurers with non-correlated investments and capital preservation strategies, primarily through repo repurchase agreements and secured deposits.

Glen Stone, Head of Trading and Execution (TreasurySpring): Thanks, AJ. I’m Glenn, and I have 30 years of experience in wholesale banking, mainly in repo markets. My career has spanned multiple crises, from Argentina to Lehman Brothers, and almost SVB. I’ll share some of that history with you.​​

AH: Let’s put this slide up for those who enjoy films. Glenn, what’s the biggest focus for treasurers and cash managers today?

GS: There’s a great line in the film where Jared Vennett says, “I work for the bank, but I don’t think like a bank.” That was in 2008. Today, corporates and treasurers need to assess risk like a bank, especially in the secured space. Whether you’re a small organization with cash or a large financial institution, you need to put financial resources front and centre when assessing risk. Banks have their ways of explaining this with terms like “revenue muscles,” but it’s about protecting your resources. Treasury Spring offers risk-adjusted returns, which may not be the highest, but they provide a form of insurance, like insuring your house against fire damage.

AH: So, should corporate cash managers expose their resources to risk?

GS: It’s inevitable. Most cash doesn’t sit under a mattress; it ends up in a bank or other products like money market funds. The product we offer is another tool in the toolkit, alongside money market funds and repos. Cash in banks plays a key role in policy 

transmission for central banks. Banks today are much larger than in 2008, with significant leverage. Despite the importance of banks, they do fail. Over the past 24 years, more than 500 banks failed in the US, most on Fridays. In Europe, we’ve seen a contraction in the number of banks, with about a third less today than in 2008.
AH: 5550 bank failures in the US and a third contraction in Europe. Are banks connected?
GS: Yes, banks are interconnected and part of leverage creation. During the Lehman Brothers collapse, we were worried Goldman Sachs and Morgan Stanley wouldn’t survive the weekend. Banks build leverage among themselves, and during stress events, this leverage can cause systemic issues.
AH: Would taking collateral be beneficial in these situations?
GS: Yes, taking collateral is crucial. It reduces loss given default and provides a buffer in stress events. We learned from Lehman Brothers to pick negatively correlated collateral. Diversification reduces idiosyncratic risk, but the next step is managing correlation risk.​

AH: So managing correlation risk through secured transactions like repos. Why aren’t most treasurers doing it?
GS: Historically, it’s been expensive with high infrastructure requirements, including trading systems, custodians, and legal work. For banks, the costs are even higher, with AML/KYC and Basel regime costs. These high barriers have prevented it from being more widely adopted by corporates.
AH: How do we solve this?
GS: We’ve created a new financial instrument to wrap repo, acting as a cash aggregator rather than a disintermediator. We aggregate multiple client pools and push the money through to banks using triparty repos, relying on market infrastructure providers like Clearstream and Euroclear.