This morning I switched on over to check out the treasury department (which consists of one person: Simon). He deals with the money market and currency swaps. What does that mean? Well, everyday customers of the bank ask for a certain amount of money of liquid cash in a certain currency. It’s Simon’s job to make sure the bank procure that currency for the customer by making a “swap.” For instance, if a customer asks for several million in Hong Kong Dollar (HKD), Simon has to swap whatever the customer has in currency for HKD. Simon has two options for making the exchange: 1) make a swap with an individual bank (directly or through a broker) that needs the other currency and can get rid of some HKD or 2) go to the Money Market to procure the funds straight out. It’s Simon’s job to make sure the bank has the right kind of currency for its customers by “squaring” the currencies with other banks. Most of the time, it’s his job not to be making huge profits on following trends but rather to simply not lose money. He takes a spread on each transaction depending on the type of customer account in balancing funds for most of the Asian currencies. His pool of money is entirely different from the pool the Foreign Exchange folks are working with.