Corporate Treasurers Show Increased Expectations

JPMorgan Asset Management has revealed emerging trends from its latest global cash management survey, which was carried out in conjunction with The Association of Corporate Treasurers (ACT) and endorsed by the European Associations of Corporate Treasurers. It showed that, in spite of the rise in demand for higher credit ratings and the increased use of bank deposits, treasurers’ return expectations have increased since last year’s survey. Although pooled fund allocations fell in general from 12 months ago, the mean portfolio allocation to money market funds among pooled fund investors rose to 82%, a rise from 72% in the 2005 survey. Money market funds are also the most popular vehicle across all regions. In terms of cash management developments possible in the next five years, responses included the expectation that cash investment management processes would become ever more automated, while many treasurers also believe we will see an increase in cross-border pooling and more consolidation among providers. European investors made many references to regulatory developments, including the impact of the single euro payment area (SEPA) on their ability to manage their cash effectively. On the subject of the impending introduction of SEPA, treasurers were asked how they thought the new regulatory regime would affect them going forward. While many treasurers believed SEPA would be generally positive, leading to greater efficiency, cost savings and greater accuracy, it was also interesting to see that a significant number of respondents, even in Europe, believe that the changes will have little or no impact on their operations. Several respondents believe that it will have no impact whatsoever, which is perhaps surprising given SEPA’s wide-reaching format.


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