1 min readSurvey goal To shed light on treasury departments’ efforts to mitigate liquidity risk in short-term cash investment, debt and forecasting practices. Summary of 2013 Survey Treasurer’s Mindset: “Surpising Complacency with Bank Exposures” Context: FDIC insurance dropped from Unlimited t0 $250,000 Dodd-Frank Bank deterioration continues Select Highlights: Debt: Continued increase in staggering facilitites Fewer loan covenants…
2 min readEach year at this time we look ahead and identify challenges that we believe will define the landscape treasurers will face in the New Year. Not unlike the GPS tools that can identify traffic, weather and detours that may be encountered en route to one’s destination, our goal is to survey the road ahead to…
2 min readAbstract We have identified the acceleration of money market fund reform, the scarcity of eligible investments and the threat of negative yield as three challenges facing corporate treasury professionals in 2013. Our recommendation remains the same as found in previous research – consider a separately managed account as a defensive measure against regulatory uncertainty, supply…
2 min readExecutive Summary The use of separate accounts to complement money market funds (MMFs) may help optimize risk and reward trade-offs in corporate cash management. The investments of time and research in establishing a separate account relationship may bring just rewards in times of uncertainty. Separate Account Simulator™ Results: A 50/50 portfolio of 60-day WAM may…
1 min readThe FOMC made two points clear in their September 13 statement as they announced an open-ended security purchase program to keep downward pressure on interest rates: “Strains in global financial markets continue to pose significant downside risks to the economic outlook,” and “Exceptionally low levels for interest rates are likely to be warranted at least…
2 min readIntroduction Since late 2008, when the $3.5 trillion money fund industry was left reeling in the wake of the Reserve Primary money market fund’s failure, a number of regulators have warned against systemic risks that institutional money market funds still pose to the financial system. In September 2008, as the tidal wave of news spread…
2 min readAbstract The challenging environment for treasury cash investments has prompted many practitioners to look for alternative options in managing their excess cash. We address this topic in a generalized manner, summarizing three major categories of available cash investment vehicles: deposits, pooled assets and direct purchases. The pros and cons of each vehicle type are discussed….
2 min readAlong with the scorching weather, July brought the hotly debated and long-anticipated proposal for money market fund reform to the hands of the SEC Commissioners for review and a possible vote. Additional regulatory uncertainty is scheduled for the end of 2012, when the FDIC´s unlimited coverage on transactional accounts is expected to expire. With two…
1 min readIn the aftermath of the 2008 credit crisis, there seemed to be just two options for investing corporate cash – government-issued or government-backed debt – allowing for capital preservation but little to no return. While the purchase of securities issued or guaranteed by the U.S. government continues to remain in favor with many corporate cash…
2 min readIntroduction Following the collapse of Lehman Brothers in 2008, the rapidly deteriorating economic environment in the U.S. and abroad caused most treasurers to reevaluate their cash investment strategies, with a specific focus on restricting investments in certain asset types. Some companies implemented these restrictions by changing their investment guidelines, while others simply gave instructions to…