Cash & Liquidity Management
Published  6 MIN READ
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Navigating Negative Rates

by Ben Poole, Ben Poole Editorial Services

Low or negative yields are commonplace in Europe today, across a range of short-term investment instruments. A well-attended workshop on the first day of the 8th BNP Paribas Cash Management University in Paris examined the current market conditions and how corporates can position themselves to best navigate the new environment.

The panel included Séverine Le Blévennec, director EMEA treasury, Honeywell, Philippe Renaudin, manager, fixed income money markets team, BNP Paribas, and Patrick Barbe, CIO - euro sovereign and aggregated fixed income, also of BNP Paribas.

Market overview

The environment for short-term investments is a challenging one for treasurers. Short-term interest rates on investments have been low or even negative for some time. BNP Paribas’ Renaudin commented that the European Central Bank (ECB) has a policy of combining low rates with injections of liquidity - monetary policy rates are at record lows, while measures such as the targeted longer-term refinancing operations (TLTFO) and quantitative easing (QE) have been implemented in an attempt to boost the effectiveness of monetary policy.