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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 and liquidity management, and how it is changing in response to regulatory and market pressures.

According to a 2017 survey from SSGA/AFP, more than three-quarters of cash holdings reside in three asset types: bank deposits, money market funds and short-dated treasury securities. Money Market Funds in particular have seen regulatory change in both the United State and Europe.

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

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Money Market Funds: A State Street Study (2018)
Reforming global money markets has been a key focus for regulators. To address risks in this area, the European Parliament implemented the EU Money Market Fund reform. Here are State Street's findings from surveyed investors regarding this new regulation.

Global Cash Outlook 2018: Cash Investment in a Shifting Rate Environment (SSGA)
As 2018 gets under way, cash investors are likely to see a continuation of the trends that developed through the past year. With most parts of the global economy on a growth trajectory, an overarching theme of tightening monetary policy may ripple through financial markets, even as central banks around the world are at different points in the interest rate cycle.

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

DB Pension Schemes: Raising cashflow awareness (LGIM, 2017)
(For compliance reasons, this paper is not accessible in the USA or Canada)

Around the world, DB pension schemes are maturing. According to recent research, over half of them are cashflow negative or soon will be. This four-page paper by Legal & General Investment Management explains what schemes can do to better manage their cashflows.

US Money Market Fund Reform: Assessing the Impact (BlackRock, 2018)
This six page document from BlackRock assesses the impact of the US Money Market Reforms, which were finally implemented in 2016.

A Shifting Cash Landscape: EU Reform Investor Survey (SSGA, 2017)
The EU's money market reform will go into effect on 21 July 2018 for new funds, and on 21 January 2019 for existing funds. Investors will need to study for the new rules, identify fund types that meet their needs, and review their Investment Policy Statement. This report by State Street Global Advisors presents the findings of a recent survey of nearly 100 investors preparing themselves for the regulatory change.

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.

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.

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.

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.

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