Cash & Liquidity Management

Cash Management - Liquidity Risk Management Tools for Treasurers

Given the current environment, companies are holding more cash today than in previous years to brace themselves for the prolonged credit crisis at hand. Currently all companies in the S&P 500 stock index have increased their cash across the board by 1.5% year on year. Technology companies, who remember well the dot-com crisis earlier in the decade, have stock-piled nearly $232bn in cash and cash equivalents (up 6% year on year). In the risk-driven world of hedge funds, managers are moving into the safe haven of cash, effectively foregoing potential returns for the assurance of liquidity and the ability to pounce on opportunities to buy beaten-down assets. How does this translate for a corporate treasurer in today’s highly volatile environment?

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