2016 Liquidity Risk Survey

Survey Goal

To shed light on treasury departments’ efforts to mitigate liquidity risk in short-term cash investment, debt and forecasting practices and changes over time.

Seven Key Things We Learned From the 2016 Survey

Ignoring Bank Exposures

1. Treasury and financial professionals have not materially changed their exposure to Bank Deposits in the wake of significant ongoing changes in banking regulation
2. Survey results indicate a significant portion of Treasurers are going to leave Prime Money Funds, but an even larger portion don’t yet have a plan to deal with Money Fund reform.

Areas of Progress and Items to Note

1. Ongoing calibration of investment policies:
   • Fewer firms have updated their investment policy in the past 2 years
   • More firms are setting limits on uninsured bank deposits
2. Investment policy latitude continues to expand in an environment of continued supply contraction
3. Progress has been made on risk frameworks and policies governing counterparty risk exposures and investments
4. Firms have diversified their maturity dates for their credit facilities as banks reduced loan covenants and increased asset backed lending requirements
5. Notable multi-year trends. Staffing increases and fewer loan covenants

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