Cash Pool­ing in Cent­ral & East­ern Europe

14/02/2011

Cash pooling enables corporate groups to minimise expenditure incurred in connection with banking facilities through economies of scale.

Under a cash pooling arrangement, entities within a corporate group regularly transfer their surplus cash to a single bank account (the “master account“) and, in return, may draw on the funds in that account to satisfy their own cash flow requirements from time to time. The master account is usually held by the parent company or by a “treasury company“ established specifically for this purpose. Depending on the type of cash pooling arrangement, the participating entities may transfer either their entire cash surplus (“zero balancing“), or cash exceeding a certain surplus level (“target balancing“). In general, all entities participating in the cash pooling arrangement will be liable for any negative balance on the master account, irrespective of the amount they have contributed.

Please check the PDF for more detailed information.

Publication
Cash Pooling in Central & Eastern Europe
Download
PDF 4.5 MB