This will see them progress on the path towards centralisation in 2015, leveraging, for example, their recent implementation of the SEPA regulation. With SEPA, single account solutions – which use Payments-On-Behalf-Of and Collections-On-Behalf-Of structures through an in-house bank – have gone from theory or small scale to become the new best practice in European cash management.
US blue chips are also cash rich, and their treasurers are approaching their banks for yield and, more importantly, to protect their cash so they can use it to invest appropriately – whether for their European operations or elsewhere.
However, Basel III’s Liquidity Coverage Ratio (LCR), which takes effect in 2015, means that corporates will have to hold their non-operational cash with banks for at least 30 days to ensure yield.
Deposit “stickiness” will therefore become more formally defined, and new account types will reflect the LCR requirement. For instance, “notice accounts” are likely to set an important precedent, introducing a stricter trade-off between liquidity and yield.
Banks are already advising their clients on how to navigate and benefit from all the regulation that has come into effect, and this will continue into 2015. And the same goes for US corporates operating in Europe.
The UK’s Prompt Payment Code will have a significant impact on the relationship between large businesses and their suppliers. What does the Code mean for your business? And how can you navigate this change effectively?
When it comes to the relationship between Europe and Britain – uniformity isn’t a word that currently springs to mind. And that’s not just a reference to Brexit. Whilst the Europe and Britain do find themselves in the midst of a political break-up – their monetary policies are also showing signs of divergence.
Europe’s introduction of the General Data Protection Regulation (GDPR) next May will have implications for businesses around the world and US corporates should start getting ready if they haven’t already done so.
As anticipated, US organisations exited prime money market funds en masse following last year’s SEC reforms. AFP’s latest Liquidity Survey indicates what it will take to encourage them back.