The need for effective cash management has never been greater, with interest rates cut to historic lows. The credit crunch has taught clients to be wary of some cash instruments, which has presented cash management providers with more challenges this year.
Throughout these difficult conditions, JP Morgan has shown itself to be flexible and trustworthy and has implemented a series of innovative structures for clients. It implemented a bespoke agency cash investment solution executing overnight time deposits with counterparties of high credit quality for the Dublin hedge fund office of a global asset manager. It could also extend an intraday credit line to allow the manager to cover same-day redemptions.
It has worked with a large Swedish insurance company to deliver an AAA rated solution that offered capital preservation and full daily liquidity alongside strong investment returns.
The stable balance deposit account has been a key innovation of 2010. It has proved popular and has been delivered to a Middle Eastern sovereign wealth investor, among others. It operates like any standard London-based demand deposit account, but with a premium rate of return for balances within a pre-agreed stable balance range. It has competitive yields on surplus balances, easy access to funds, same-day liquidity and no additional charges if balances fall below a defined threshold.
In 2010, JP Morgan has also seen upgrades to its web-based liquidity management platform – ACCESS Liquidity Solutions. These upgrades have given clients greater transparency on their cash and investment balances, and greater control of their global liquidity positions. It has provided clients with the ability to view and manage their global cash concentration structures online; invest surplus liquidity into a variety of instruments; and enhance its operating efficiency with a streamlined and consistent service and a uniform portfolio of products across multiple locations.
This is part of a $3 billion global investment plan to enhance the group’s cash management and liquidity capabilities in key markets around the world. It shows JP Morgan’s continued willingness to innovate.
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