Using Money Market Funds during Economic Instability

ATEL/TMI Treasury Forum

Sofitel, Luxembourg – 19 June 2008

RP

Welcome to this special forum hosted by ATEL in which we are joined by some of the most significant players in corporate treasury today. Today’s objective is to discuss some of the key implications of the credit crisis and how it is affecting treasurers. How are you managing cash, how has life changed since a year ago and how are you responding to market events? We will also discuss the value of money market funds in the treasurer’s armoury.

FM

Firstly, as Chairman of ATEL, I would like to add my thanks to Robin’s. Since the so-called sub-prime crisis last summer, there are still considerable consequences. The cost and difficulties in obtaining funding have increased and the money markets continue to change over a period of weeks and months. I’d like to share with you some of my views from a corporate perspective.

Like many companies, we have achieved high levels of cash surplus – at least a quarter of large corporations in Europe have a substantial liquidity portfolio.

This creates an issue of what to do to boost your return, especially in a low interest rate environment. Unfortunately, even as interest rates increase, inflation is also increasing, so it becomes difficult to achieve good returns in real terms. It might seem easier to manage cash than debt, but in these uncertain times, there are often problems.

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