Corporate cash seeks new home as money-market reforms loom

New regulation on both sides of the Atlantic threatens to make money-market funds less attractive for corporate treasurers. Banks are hoping this cash will flood into fixed-term deposits instead, helping them meet incoming liquidity ratios, but they’re struggling to make headway. By Tom Newton


It seems too good to be true – at a time when banks are increasingly hungry for deposits to meet the demands of Basel III’s twin liquidity ratios, their corporate customers are considering pulling billions of dollars of cash out of money-market funds and finding a new home for it. The funds are being revamped in a way that could remove their three big attractions for treasurers – capital protection, daily liquidity and the ability to account for the investments as cash on corporate balance

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