2 min readAbstract Bank deposits have always represented the main cash management vehicle for institutions. Growth in deposits and money market fund balances crisscrossed each other over recent decades. Recent financial regulations, notably the liquidity coverage ratio, net stable funding ratio and G-SIB capital surcharges, caused deposit dynamics to change, reducing banks’ appetite for non-operating deposits. We…
1 min readAbstract Greater vigilance is required of today’s treasury investment professionals. Neither bank deposits nor money market funds may be appropriate in the post-crisis, post-regulatory environment. As yields start to rise, cash investment strategy decisions that may have been delayed will require serious consideration. Direct purchases in separately managed accounts may become the primary alternative cash…
2 min readAbstract Deposits at the 20 largest U.S. banks are generally concentrated in banks with Tier 2 ratings, many of which are just one step away from BBB status. Significant cross-concentration of bank names also exists in large prime money market funds. The dominance of bank exposure in corporate portfolios through deposits and money market funds…
2 min readAbstract The expiration of transaction account guarantees requires actions from treasury cash managers. While essentially all of the $2.0 trillion growth in domestic deposits since 2007 went to the 20 largest banks, the banks’ deposit credit strength declined by almost three ratings notches over the same period. Although 13 of the 20 had Aaa deposit…
2 min readExecutive Summary As risk averse cash investors slowly move away from an aggressively conservative strategy, we take a look at two developing trends that investors may be considering and some potential pitfalls. Emerging Trends: Bank Deposit Accounts Prime Money Market Funds We think that the credit market has probably exited the free-fall phase and has…