As the European Association of Corporate Treasurers (EACT) celebrates its 20th anniversary during 2022, it is an appropriate moment to reflect upon its journey from being a group of professionals largely concerned with their own national concerns, to the visionary, receptive, and respected organisation it is today.
The first associations of corporate treasurers in Europe were created in the Seventies. The French Association Française des Trésoriers d’Entreprise (AFTE) was founded in 1976, closely followed by the Association of Corporate Treasurers (ACT) in the UK in 1979. Other associations were formed over the years.
Initially, the work of the national associations was generally focused on their respective countries, but the prospect of the introduction of the euro (the non-physical form was launched at midnight on 1 January 1999 with notes and coins following on 1 January 2002) and its implementation meant they had to take an outward-looking, collective approach. Sister associations within Europe had to strive to co-ordinate their actions.
The first major joint initiative in Paris in 1995 brought together several European treasurers’ associations, Die Gesellschaft für Finanzwirtschaft in der Unternehmensführung e.V. (GEFIU – the Association of Chief Financial Officers Germany) and the European Commissioner responsible for economic and financial affairs. The group was faced with the task of preparing the European Commission’s (EC’s) Green Paper on the euro.
As a result of this meeting, the associations were unanimous in continuing to co-operate with each other, and so decided, at that stage, not to create a formal structure. Three years later, it was agreed that the informal Euro Association of Corporate Treasurers (EACT), bringing together only the heads of the corporate treasurers’ associations in what would become the Eurozone should be created.
Having established contact with the EC, the EACT began working with the European Central Bank (ECB). The ECB wanted to address the potential challenges posed by payments and obtain the opinions of the representatives of the future Eurozone treasurers’ associations. As a result, at the end of 1998, the EACT was received by the ECB’s Director General of Payments along with representatives of the AFTE and the GEFIU.
On 1 January 1999, the Euro was launched. Initially it was used only for accounting purposes and electronic payments (as previously mentioned, banknotes and coins introduced 1 January 2002). Also in 1999, a vast eight-year project started which would profoundly modify the rules of good practice (including duties of information, advice, warning, and primacy of the client’s interest) between investment service providers (ISPs, mainly banks) and corporate clients. This was the revision of the Investment Services Directive (ISD), implemented in 1993, which would be replaced by the Markets in Financial Instruments Directive (MiFID), published in 2004.
Against a backdrop of increasing liberalism in the banking and financial services space, ISPs jumped into the breach, introducing the concept of ‘professional client’, a status already in force in the UK and the US, implying a complete absence of rules of good practice, and to seek to impose the same rules in the draft MiFID. The EACT, which was opposed to this light-touch approach, was able to convince the future Chair of the European Parliament's Committee on Economic and Monetary Affairs to table – not without difficulty, but with success – an amendment on two major points. These were that the rules of good practice, albeit relaxed, be maintained for professional clients, and that banks must not impose on the latter the status of eligible counterparty, which would be synonymous with a total loss of protection. This position was maintained when MiFID 1 was revised in 2011.
Following the financial crisis of 2008, and faced with the desire of the American and European regulators to implement rules to make exposure to derivatives more transparent (European Market Infrastructure Regulation [EMIR]), the EACT found it had a battle on its hands.
It fought hard with the EC to prevent all derivatives transactions from being systematically cleared on organised markets (with collateral deposit and margin calls). The EACT obtained an agreement that this central clearing applied only above significant thresholds (€1bn to €3bn, depending on the asset classes) and that hedging, and treasury operations, would continue to be able to be carried out in over-the-counter (OTC) markets.
EACT has a strong history of engagement with key European regulatory authorities. Current Chair François Masquelier reflects on some key moments.
The Single Euro Payments Area (SEPA) was launched in the early days of the EACT. It was extremely important for EU members and beyond (reaching some 36 countries) as its intention was to harmonise the way cashless payments are transacted between euro countries.
European consumers, businesses, and government agents that make payments by direct debit, instant card transfer, and credit transfers, all use the SEPA architecture to transact across borders with the same cost and convenience of domestic payments. As always, the EACT favoured the standardisation and equal treatment of charges for both domestic and cross-border payments.
It helped that the EACT is a member of the European Payments Council (EPC), which today administers SEPA across the 27 EU members and nine other European countries where the euro is commonly used. This enabled it to play an active role in guiding the outcome of SEPA discussions. The EACT supported SEPA, which was aimed at promoting labour mobility and economic integration among SEPA member countries. The EACT also saw that the proposed system would bring more competition to the payments industry by creating a single market for payment services, thus bringing down prices. Here again, the results of the EACT’s support and engagement with the authorities were felt to be a good win for members.
Another important engagement for the EACT concerns the adoption of International Financial Reporting Standards (IFRS) rules by the EU. The EACT has always been a supporter of IFRS, which is aimed at standardising and harmonising accounting rules, and driving increasing transparency and comparability. Once adopted, the EACT reacted strongly in favour of IAS 39, and its successor IFRS 9, on financial instruments because these two standards were vital for treasury business.
It took its arguments to the International Accounting Standards Board (IASB) and its working groups, and to the European Financial Reporting Advisory Group (EFRAG) which advises the EU on the adoption of accounting standards. The EACT also went to the EC itself to ensure no exceptions or divergence from US generally accepted accounting principles (GAAP). The EACT has always advocated harmonisation and alignment as a means of creating a level playing field. More recent announcements that an IASB working group is to study an ESG standard will naturally see the EACT participate fully in the discussions and consultations, with the intention of having its members voices heard.
The EACT has always been in favour of the Payment Services Directive (PSD), but its update, PSD2, has exceeded expectations and hopes. Indeed, PSD2 is seen by the EACT as a game-changer, even though its consequences for the sector, and benefits for corporates, are yet to be fully measured. As part of this movement, open banking, although in its infancy, remains hugely promising in terms of developments between banks, fintechs, APIs and corporate treasuries.
With all of these significant changes to the treasury landscape, the objective of the EACT has and will always be to defend the interests of treasurers to the best of its ability. The aim is to actively seek to avoid or prevent any measure that could have a direct or indirect, quantitative, or qualitative impact on their capacity to execute their day-to-day tasks, while preserving the resilience and stability of the financial markets as a whole.
Indeed, the goal is to keep the spectre of systemic risk at bay, but not at any cost. In its endeavours to influence the decision-making process, the EACT therefore understands that it must first identify the regulations that could impact its members, measure their impact, and then define the best strategy to achieve its goals. This is advocacy in practice, and it requires being listened to, and heard by, the stakeholders on the legislative side.
It is a didactic effort to ensure all stakeholders fully understand how sometimes a measure can have an unintended impact on the real economy, and ultimately be counterproductive to the EU’s objectives. As an example, with EMIR, and the subsequent EMIR Refit of June 2019 (which amends and simplifies EMIR), the EACT obtained indisputable impact results that enabled avoidance of collateralisation obligations while also gaining an exemption from reporting intercompany transactions. The combined financial and reporting benefits for corporates were considerable.
Over the years, the EACT has earned credibility, with its presence and participation in various regulatory committees, working groups and forums. If the EACT is now a representative player at the European level of the treasury profession, it is because it has made its voice heard, and it has actively participated in a wide range of meetings, plenary sessions, public hearings, and discussions. Its reputation, role, and strong presence has been acquired over the years thanks to the quality of its interventions, the relevance of its arguments, and the effectiveness of its actions in defending the interests of treasurers.
In the regulatory space, the EACT’s voice represents the real economy. It is now widely heard and considered by the authorities. Of course, this is the result of unceasing effort, but it knows it must now maintain the trust of its interlocutors, and remain worthy of it, if it is to be listened to and understood.
During a meeting in Amsterdam in 2002, it was decided to transform the EACT’s initial informal structure into a formal union of associations and without individual members. The founding members were AFTE, ASSET, ATEB, ATEL, DACT, IACT, VDT. The first President was François Masquelier, then President of ATEL. The headquarters were, and still are, in Paris and the secretariat was, and still is, provided by AFTE.
In October 2004, given its contact with National Treasury Associations (NTAs) beyond the Eurozone, it decided to become the European (as opposed to Euro) Association of Corporate Treasurers, opening its doors to all associations of corporate treasurers and financiers in the EU.
According to its by-laws, the main EACT’s objectives include:
In 2009, EACT hired specialist firm Avisa Partners to monitor regulatory developments, to raise its profile in Brussels with the European authorities, and to further professionalise its lobbying activities. The EACT then opted for a dedicated ‘inhouse lobbyist’ instead. At the end of 2018, it selected specialist firm, Fleishman Hillard to take this role, before moving the role back inhouse. When the most recent incumbent departed in 2021, it reverted once more to Fleishman Hillard’s services.
To broaden its spectrum of activities and strengthen the connection between its members, the EACT has undertaken three important initiatives since 2016.
Over time, the EACT or its representatives became members of various stakeholder bodies put in place by institutions such as:
The EACT has close links with the International Group of Treasury Associations (IGTA), which comprises 30 members and four observers. EACT and IGTA have collaborated on several occasions.
Among the many partners with which the EACT has established agreements, two deserve to be highlighted: Treasury Management International (TMI), which since 2003 has provided unfailing support through stewardship of the EACT Summit and the boards of directors, maintenance of the website, and TMI magazine; and EuroFinance, which provides leading treasury, cash management and risk events, training and research, and notably supported the EACT financially between 2004 and 2014.
In this anniversary year for the EACT, le bel âge as one might say, members will naturally be focusing on the opportunities and changes that lie ahead. With regulatory pressure decreasing – updates of existing texts but few new regulations – the EACT now faces a double challenge: to encourage meetings between the member associations, via the EACT Summit for example, and to further develop the exchange of good practices.
The current Chair, and previous occupants of this vital role, share their experiences of the EACT.
I’m proud to have had the chance to be part of the group, which was present during the first exchanges and meetings that preceded the creation of our European association. One could say that today, I am a veteran of the EACT. As you will have read earlier, at its inception in 1998 the founders of this association named it Euro Association of Corporate Treasurers since it included only a few national associations of the Eurozone. However, we soon realised that it was necessary to expand to include other countries outside the Eurozone.
Indeed, our notion of Europe, long before Brexit, went beyond the EU itself, which is why today we have among our members associations located in countries outside the EU. It’s our aim to reach as many countries as possible where an association of treasurers already exists, but we are also on hand to help create one. Most recently, we supported the creation of the Hellenic Association of Treasurers (HAT) in Greece.
Our original idea was to share best practices in treasury, to exchange across borders with our peers and colleagues and to influence, as much as was possible and necessary, the European regulations and directives dictated by Brussels. We understood that the future of financial regulations, long before the 2008 global financial crisis, would be decided in the capital of Europe. It was therefore essential to federate. Today, we are the representative body of 24 associations in 22 countries. We operate at the highest European level, raising the voice of treasurers and defending their interests. This is what we have always done, and will continue to do, as the flow of financial regulations will never abate.
We have, for example, contributed, alongside the International Group of Treasury Associations (IGTA), to the code of conduct for credit-rating agencies, to the FX code of conduct, and to the reshaping of the EMIR regulation to avoid collateralisation obligation. We have helped shape IAS 39 and the subsequent IFRS 9 rules. We have been an active member of the European Payments Council (EPC) for many years and remain active in working groups led by the European Central Bank (ECB).
Our participation in numerous public hearings, surveys, and our response to position papers, projects and other working groups is strongly vocal, speaking out for treasurers and defending their interests. Our association can congratulate itself on having for the past 20 years contributed to the defence of the profession. We have been dedicated to striking the balance between the necessary strengthening of the entire financial system and the fight against systemic risks on the one hand, and on the other, ensuring practicable and reasonable rules and exceptions for the real economy.
The construction of a European treasurers’ association is similar to the construction of the EU. Sometimes it is complicated, requiring a capacity for consensus and compromise, with the agility to reconcile the positions of all sides. The EACT has, like any organisation comprising members from different countries, sometimes with divergent views, had to compose, adapt, and progress gradually. However, the spirit of collaboration and sharing has always prevailed in our discussions to defend our cause and achieve our objectives. It would be wrong to claim that it has always been without difficulties; we can only salute the ability of the EACT members to grow and move forward – and that has always been evident at our meetings.
We are proud of what the EACT has become, of what it has achieved, and of the recognition it has received from the European financial community and its stakeholders. It was a challenge to make it happen, but together we have achieved it. However, we still have a long way to go. European regulations and those from other jurisdictions keep coming in waves. There are many areas of attention for every treasurer and for the EACT as a whole. We are working hard on these with our advisers, Fleishman Hillard, and the Financial Reporting Advisory Group (FRAG).
Our goal is to continue to develop the EACT. We aim to expand it as much as possible, to share best practices in treasury across Europe in the broadest sense, and to harmonise techniques, standards, and other practices for a more efficient, modern, and secure treasury, in compliance with all applicable legislation. We want to perpetuate our association, so we continue to fulfil all of our missions and assist members. The world of treasury is complex by nature, evolving, and highly dependent on technology. We must support our National Treasury Association (NTA) members, and their local members. This is an ongoing challenge, but with my colleagues on the Board, we intend to achieve our goals.
From the original forum for nine associations at its creation in 2002, the EACT has grown into being the voice of treasurers in Europe, and now boasts a membership of 24 national treasury associations. I have seen many changes during that period of growth and development.
We created our own specific event, the EACT Summit, we have formed a number of productive long-term partnerships, and have been instrumental in developing treasury thought leadership with our Journeys To Treasury report which provides a unique, virtual forum for sharing, learning, and implementing best practices across the treasury profession. We also established the EACT Award programme to recognise the skill and professionalism of our individual members.
During my tenure, three new associations joined the EACT: ACTA from Austria, ATR from Romania in 2018, and HAT from Greece in 2021. I also represented market participants in ESMA’s Securities and Markets Stakeholders Group.
There will be a number of strong influences on the direction of the EACT over the next few years, key among these will be the emergence of new technology and regulations. The EACT is ready to help members respond in the most appropriate way.
I was fortunate to serve as the EACT’s Chairman from 2008 to 2015, which was, of course, the period in which we had to respond to (and where appropriate, challenge) the direction of post-financial crisis regulation. This was a huge issue for European economies and specifically for everyone involved in the treasury profession. For me, this exemplifies the relevance of the EACT and how, over its 20-year life, the organisation has managed to grow and respond to events that impacted its member associations.
It’s important also to stress that the changing composition of the EACT fundamentally characterises its purpose and responsibility. What began as a group of treasury associations grappling with the introduction of the single currency, widened to include members from all EU countries and then to a broader grouping of European rather than just EU bodies. I have always supported that expansion and I believe it was entirely in the interest of the treasury profession.
I’m sure that the EACT faces many more challenges as it works towards its goals of supporting the development of treasurers and the treasury profession; and it must continue to provide a respected voice and valued opinion in European and international regulatory debate.
That said, the world in which treasurers work will inevitably change and develop still further. It’s good to see the EACT already contributing to blockchain technology issues. As we look forward to a world emerging from the massive disruption caused by the pandemic, treasurers and their organisations are now facing the shock of military and political events in Eastern Europe. Risk management always was, and will always remain, central to the work of treasurers; that tenet looks to be even more important today.
I very much enjoyed my two-year experience but have now been retired from the world of treasury for more than a decade. The EACT was, of course, created to connect treasury associations and help them manage the arrival of the euro. It was our job to represent the treasury community during this period, mostly around euro migrations.
We later expanded the role and reach of the EACT to other treasury communities, and one of our strongest moves in this sense was achieved by joining the IGTA, which I also chaired for two years.
Having been a large part of my professional life, I’m very happy that the EACT remains fully active, alert, and that it strongly represents the treasury community, especially in the face of some very challenging times.
NTAs in Europe started to develop in the Seventies. It soon became obvious to all that it would be more effective to work together on key issues, most notably the creation of the euro. Acknowledging the value of collaboration, an informal union – the Euro Association of Corporate Treasurers – was launched in 1998.
In 2002, this union evolved into a formal association, consisting then of seven associations from across the Eurozone, and chaired by François Masquelier. In 2004, to reflect the rapidly developing nature of corporate treasury, the name was changed. By shifting the emphasis to the European Association of Corporate Treasurers, all treasurers and financial associations of the EU could now apply for membership.
The initial EACT objectives – to develop relationships with European institutions, and to undertake joint actions in response to issues in treasury and finance in the EU – remain at the heart of what it does. I recall, among many others, meetings with the then EU Commissioner Charlie McCreevy during the development of PSD, talks with the Economic and Monetary Commission of the European Parliament, discussions on international accounting standards (IAS) and MiFID, and the EACT developing Corporate Action on Standards (CAST) projects to increase SEPA efficiency in areas such as e-invoicing and reconciliations.
Of course, other objectives were quickly added, these having grown in importance. Developing co-ordination and co-operation between members, promoting and raising the profile of the profession, undertaking joint research, and developing our communication programme, have all become core parts of what the EACT does and is.
By 2007, when I stepped down as Chair, EACT covered 18 associations, encompassing more than 4,500 companies and 8,000 individual members. We had already established working relationships with key European bodies such as the EC, European Parliament, the ECB, EPC, and the Committee of European Securities Regulators. And by then, TMI was helping us refine and deliver our communication agenda.
Since those days, the EACT has increased its presence in Brussels, employing one person who is dedicated to monitoring its regulatory activities. The EACT has naturally extended the offer of membership to associations in countries beyond the EU, and continues to enhance membership interaction, particularly through the creation of Journeys To Treasury, the EACT Summit and, most recently, the EACT Awards.
Of course, the world continues to change. Today, financial regulations are more complex, and social and ecological drivers, the march of digitalisation, and the long-term impact of Covid-19 on working habits have all rewritten the rules on how finance and treasury professionals operate.
Over the next few years, the EACT, like every organisation linked to the economic world, will continue to be deeply impacted by these new working models. But it will also face changes in the political landscape, at a global and regional level, with challenges and opportunities respectively arising from China and from other parts of Europe, for example. But I am confident that the EACT will be more than capable of helping its members find the best possible solutions, just as it always has.
François Masquelier (current)
Jean-Marc Servat (2015–2021)
Richard Raeburn (2008–2015)
Olivier Brissaud (2007–2008)
Pierre Poncet (2004–2007)
François Masquelier (2002–2004)
Bjorn-Erik Pagels, July 2021
Gianco Tabasso, October 2012
Johannes Puhl, 2000