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Treasury departments never stop focusing on cash forecasting, but sometimes it ranks higher on their list of priorities. This is one of those times, as factors ranging from volatility in the foreign exchange market and the prospect of higher interest rates to the effects of Basel III regulations renew companies’ interest in having an accurate
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Last year, for example, investors only put in a total $4 billion into money-market funds between May and August. This year, money-fund assets grew by $85 billion between May and mid-August. Mr. Crane said that banks, beset by new capital rules, have recently been encouraging companies and investment funds to keep less money in their
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Corporate treasuries continue to stow the majority of their short-term cash in bank deposits, according to a recent survey, and put the largest chunk of the remaining money into money-market funds, a traditional short-term investment option. But those patterns could change in the next year or so as U.S. interest rates rise and new regulations
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Money market reform in the US has progressed with the speed of a snail on valium. The idea was first floated in 2008 after the Reserve Primary Money Market Fund’s net asset value fell below $1 per share, unexpectedly saddling investors in the “cash-like” instruments with very real losses. The drop triggered a stampede out
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Bank-corporate relationships are beginning to experience big changes as a result of new regulations, such as Basel III. This is likely to accelerate in the coming months, and it behooves companies to build a clearer picture of how they divide business between banking partners in order to steer that process of change, rather than simply
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As money flows into high-quality assets such as U.S. Treasurys, money funds invested in those securities could see more inflows. Anthony Carfang, a partner at Treasury Strategies Inc., said that new banking regulatory rules could aid the funds. He explained that international bank rules are forcing banks to hold more in U.S. Treasurys, which could
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If corporations stop parking their cash in prime funds, then companies like FMC might find less demand in the marketplace for their short-term commercial paper. As those funds’ pool of assets shrinks, so would demand for commercial-paper offerings. Some market watchers think worries about the rule changes are largely overblown. They include Tony Carfang, a
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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
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With transaction banks in a state of global change, what is the impact for corporates? The transaction banking market is in an ongoing state of flux, as new entrants join the market, some traditional players depart and the biggest global transaction banks completely restructure their operations. Driven by global banking market change-from continuous growth and
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