Cash & Liquidity Management
Published 7 MIN READ

Cash Management and Investment in a Shifting World

Without a crystal ball, it is difficult to predict which path the economic recovery will take. Many treasurers are therefore wondering how to manage and invest corporate cash in an optimal manner, given the uncertainty ahead. Nevertheless, Yera Hagopian, Managing Director, Liquidity Solutions, Barclays, and Daniela Eder, Head of Payments & Cash Management Europe, Barclays, believe that treasury teams can take action today to ensure their cash management and investment strategies are fit-for-purpose in the new operating environment.

March 11, 2020, will go down in history as the day the World Health Organisation declared the Covid-19 outbreak to be a pandemic[1]. That same day, the Bank of England made an emergency interest rate cut, down from 0.75% to 0.25% [2] – and the UK government launched its Coronavirus Business Interruption Loan Scheme (CBILS). Eight days later, the UK interest rate was cut again, to an all-time low of 0.1%, and £200bn in quantitative easing (QE) was announced [3].

Similar stimulus packages were launched by central banks and governments across the globe. In the US, the Federal Reserve embraced near-zero rates and committed to $700bn worth of asset purchases [4]. The European Central Bank rolled out its €750bn package known as the pandemic emergency purchase programme (PEPP). Numerous employee furlough schemes were then added to the mix.

Meanwhile, corporates were busy taking matters into their own hands. Hagopian explains: “When the pandemic began in earnest, many companies’ immediate reaction was to have as much liquidity on hand as possible. Larger companies went to the capital markets, while smaller corporates could access government schemes – and some corporates opted for both of these avenues.”