While the treasury environment is never static, one area where it has become particularly dynamic of late is liquidity management. Multiple drivers have combined to create a situation where continuous (re)evaluation and evolution have become almost mandatory. An HSBC representative examines these factors and how they are affecting the process of liquidity management.
One of the most striking changes in corporate liquidity in recent years is its sheer volume. In the aftermath of the financial crisis, corporate treasuries worldwide put huge efforts into freeing up cash from within the business and have continued to do so. More recently, the global economy has also been picking up, with global GDP growth of 3.2% in 2017 (up from 2.5% in 2016) and some commentators forecasting growth of 3.3% for 2018 . As a result, the level of cash on corporate balance sheets has now reached exceptional levels: USD1.8trn in the US and EUR974bn in Europe, the Middle East and Africa, while collectively the 25 most cash-rich corporates globally hold just under USD829bn of cash .