To shed light on treasury departments’ efforts to mitigate liquidity risk in short-term cash investment, debt and forecasting practices and changes over time.
Seven Key Things We Learned From the 2016 Survey
Ignoring Bank Exposures
- Treasury and financial professionals have not materially changed their exposure to Bank Deposits in the wake of significant ongoing changes in banking regulation
- Survey results indicate a significant portion of Treasurers are going to leave Prime Money Funds, but an even larger portion don’t yet have a plan to deal with Money Fund reform.
Areas of Progress and Items to Note
- Ongoing calibration of investment policies:
- Fewer firms have updated their investment policy in the past 2 years
- More firms are setting limits on uninsured bank deposits
- Investment policy latitude continues to expand in an environment of continued supply contraction
- Progress has been made on risk frameworks and policies governing counterparty risk exposures and investments
- Firms have diversified their maturity dates for their credit facilities as banks reduced loan covenants and increased asset backed lending requirements
- Notable multi-year trends. Staffing increases and fewer loan covenants