Fixed Income and Treasury

The changing face of cash management

10 Top Papers on Cash and Liquidity Management

The last few months have seen some excellent white papers on cash management, and how it is changing in response to regulatory and market pressures.

According to a recent survey by SSGA/AFP, more than three-quarters of cash holdings reside in three asset types: bank deposits, money market funds and short-dated treasury securities. The liquidity management survey analyses the cash marketplace in some detail, with interesting sections covering how investors assess banks for bank deposits, their rating requirements for money market funds, and how policies are changing in respect to SEC reform of MMF rules.

The papers below are of interest both to Treasurers and Portfolio Managers, covering a variety of topics around the subject of liquidity management.

Savvy Investor

2017 AFP Liquidity Survey: Report of Survey Results (SSGA)
This report by SSGA and AFP provides the findings of a recent survey on liquidity. It delivers critical insights into the challenges of navigating shifts in the geopolitical, interest rate, and regulatory landscapes of cash management.

Cash - more than what's in your wallet (GMO, June 2017)
This paper by GMO will elucidate a number of types of liquidity instruments, including cash, and strategies.

The First 100 Days as a New Treasurer (Treasury Strategies, 2017)
Advice from Treasurers on what they did, what they wish they had done, and what they recommend you do in your early days as a new Treasurer.

State Street Global Advisors 2017 Cash Outlook: State of the Markets
In this paper, SSGA outline their view that cash investing is entering a new era of increased resiliency and liquidity—propelled by US money fund reform, upcoming reforms in the EU and a new regulatory-friendly regime in Washington.

Cash: An Asset Adolescence (Northern Trust, 2017)
This Northern Trust paper explores the costs and challenges of cash, and what can be done to overcome the liquidity conundrum.

Liquidity Management: Thriving in a New World (Deutsche Bank, 2016)
Today’s financial environment is the polar opposite of the pre-crisis landscape, for bankers and treasurers alike. Both may feel that they have entered an inverted world where interest rates are negative and cash deposits can cost money.

The bond benchmark continues to tip to swaps (BIS, 2017)
This white paper by BIS explores how the ease of unwinding positions in futures may stop swap rates from completely displacing government bond rates as benchmarks.

The unintended consequences of the ZIRP for money market funds (VoxEU, 2016)
This column by VOX EU explores whether the zero lower bound policy had unintended effects on the money market fund industry.

The Rise of Chinese Money Market Funds (Reserve Bank of Australia, 2017)
This paper looks at Chinese Money Market Funds and how they offer a convenient cash management service. The authors also explore recent regulatory reforms, and how these may start to align them with similar products in other countries.

The Money Market Fund Industry after the 2014 Regulatory Reform (FRBNY, 2017)
In this paper, the FRBNY documents the reaction of investors in money market fund (MMF) and portfolio managers to a new SEC regulation that came into effect in October 2016.