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 2012 Survey Treasurer’s Mindset: “Cautious, but Ready to Act” Context: FDIC insurance changes Pending Money Market Fund Regulations (5%, Floating, NAV, Capitalization) Select Highlights: Debt: Additional diversification Increased collateral Continued tighter covenants Forecasting:…
2 min readAbstract We set out to answer 10 of the most common questions related to writing investment policy statements (“IPS”) for cash portfolios. In doing so, we will provide a number of peer group data comparisons to add insight into the process. The treasury investment management landscape has undergone significant changes. We found that investors tended…
1 min readIn May, several Treasury conferences from Oregon to Massachusetts had well-attended sessions on investment policy design and construction. This interest may have been sparked by upcoming regulatory changes affecting bank deposits and money market funds, as the risk/reward nature of these investments is under review and likely to change. A robust investment policy enables controlled…
2 min readExecutive Summary The complementary use of commingled and separate accounts may help in optimizing corporate cash management. The percentage of corporate investors considering money market funds as permissible investments has been declining since 2009, while the permissible use of separately managed accounts has been climbing. Six Advantages of Separately Managed Accounts: Tailored Risk Management Transparency…
2 min readResults from the Capital Advisors Group/Strategic Treasurer 2012 Liquidity Risk Survey, to be released later this month, portend the shifting regulatory environment will significantly impact investment vehicle preferences for corporate cash managers. The survey results remind us that changing regulations can be a major catalyst in modifying investor behavior. After the Lehman bankruptcy, regulators deployed…
3 min readAbstract We propose a variable Net Asset Value (NAV) approach based on a dual-NAV structure to preserve the transactional utility of money market funds. This approach would require funds to publish daily intrinsic NAVs up to the 4th decimal place, and would allow shares to be traded at rounded NAVs (RNAVs) up to the 2nd…
1 min readAbstract Recent developments in corporate cash investments resulted in portfolios of different risk characteristics having little yield differentiation. Popular cash vehicles, including prime money market funds, FDIC-insured transactional accounts and all-Treasury portfolios, require a fresh look in this new environment. Improving a portfolio’s risk/reward profile may involve diversification among cash vehicles, liquidity and maturity structures,…
2 min readPortfolio examinations are typical activities for this time of year as year-end audits get underway. What may come as a surprise, however, is the additional scrutiny on valuation methodology that auditors are requesting. Supporting our clients for this additional scrutiny reminds us of the benefits that may be achieved through our broader Credit/Risk Management Oversight…
2 min readIntroduction One short year ago, we discussed three key trends for 2011: low interest rates, a spreading sovereign debt crisis and persistent financial regulation. And we started our 2011 commentary with the phrase, “meet the New Year, same as the old.” Have we caught you in a moment of déjà vu? For 2012, we see…
3 min readThe New Year has a way of prompting us to focus on priorities and agendas for the coming 12 months and as Treasurers plan their “To Do” lists for 2012, it is helpful to identify trends and events that will shape the short-term cash management environment. A view of the potential issues that could develop…