Managing excess liquidity has never been more challenging for the corporate treasurer. Low – even negative – interest rates mean treasurers can no longer rely on leaving their excess cash in overnight deposits.
In addition, new financial regulations such as Basel III have only further complicated the question of what to do with excess liquidity: encouraging banks to welcome operating cash deposits over non-operating cash deposits.
So how can treasurers make the most of their cash? Writing in Treasury and Risk, Deutsche Bank’s Seth Brener, Head of Corporate Cash Management Sales, Americas, emphasises the need for treasurers to revise their liquidity management strategies in accordance with this new environment. “Rather than rely on old certainties, they need to seek out individualised solutions – they need to exploit their particular regulatory, macroeconomic market and investment product mix”.
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