The New Year Will Bring a New Era in Cash Management

Since the financial crisis, the near-zero rates—combined with a lengthy period of guarantees on demand deposits—helped create a “business as usual” mind-set among many treasury professionals. But 2016 promises to be a pivotal year that will usher in a new era in cash management, requiring new ways of thinking.

Compared with a decade ago, today’s cash investment landscape is shaped by higher risk awareness, more sensitivity to liquidity costs, and stricter systemic regulation. Dodd-Frank and Basel III are already causing the biggest banks to limit uninsured deposits. And when money market reforms are instituted in October 2016, institutional money funds will have less stability, greater risk, and lower yield potential.