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New rules, low rates push European companies into risky investments

European firms squeezed by low interest rates are having to consider new, riskier ways to manage trillions in corporate cash as they are snubbed by banks awash in new regulation that may also spell the demise of their go-to investment funds.

In order to protect and grow their companies’ money and ensure it is easily accessible to pay wages, invoices and dividends, treasurers are being forced to look at less secure assets and deal with some of them directly.

“Money funds are the safe harbour,” said Tony Carfang, partner at consultancy Treasury Strategies. “If that goes away you are cutting a lot of treasurers loose, a lot of money loose.” 

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Carmel Crimmins and Huw Jones – Reuters

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