Capturing Liquidity

December 1, 2011May 17, 2024

1 min read

As a business looks for strategic opportunities to deploy its cash, maintaining liquidity in its cash investment accounts is crucial. Money market funds have been the traditional answer to liquidity, but their engineered liquidity has come under scrutiny from both investors and regulators alike. Potential regulatory changes announced by the SEC on November 7 may further impact the utility of money market funds as a catchall liquidity option. Therefore, the prudent Treasurer should begin investigating other strategies for targeting and maintaining liquidity.

Understanding the characteristics of liquidity for various securities and maturities and to properly map those characteristics specifically to one’s liquidity needs is important to Treasurers seeking to meet liquidity objectives. For more than 20 years, we have been managing liquidity for our corporate clients and, during this time, we virtually have seen it all; from the notion that ratings and liquidity go hand in hand to a variety of liquidity interruptions in the markets to companies paying the price of misguided liquidity assumptions. Because of all of the uncertainty surrounding liquidity, this month we wanted to publish research that looked under the hood of liquidity – a practical guide for defining liquidity and using its characteristics effectively to meet liquidity goals.

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Best Regards,

Ben Campbell
President & CEO

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Benjamin Campbell

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