State of the Treasury
Each year, we ask corporate treasuries to tell us what’s on their minds as part of our annual State of Treasury Practice survey. We know there’s a lot on your plate at the moment and would like to hear what are your biggest priorities and your concerns for 2021?
Treasurers have long expressed a desire for enhanced cash-forecasting capabilities, but that often-talked-about priority has now become a critical need.
In Treasury Strategies’ recent corporate bank fee management survey, 70% of corporate treasurers said they review their bank service fees on a monthly basis. Yet only 21% use service price benchmarks in their bank fee management program. That’s a huge disconnect.
When interest rates were zero, the opportunity cost to a corporate treasurer of idle cash balances sitting in a bank was zero. With recent Federal Reserve rate hikes, that has all changed. Indeed, a cash manager not carefully managing daily cash positions today is incurring a real cost.
They arrive each month – those balance and service fee statements that itemize everything you’re being charged for in painful detail. The question is, how can you easily make sense of them? Here are some pointers for a good monthly bank fee analysis process.
Companies spend $20 billion per year on bank treasury management services in the U.S. and $200 billion worldwide. Corporate treasurers who optimize their use of these services enjoy accelerated cash flow, improved risk management, higher investment income and quality information, all at a reasonable cost.
Treasury Strategies, a division of Novantas, Inc. released its 3rd quarter ECR benchmarks to NDepth Bank Fee Analysis clients recently. The surprising results showed some unusual patterns overall as well as striking differences between U.S. money center and regional banks.
The results are in and reveal an important area of opportunity neglected by corporations. On average, the 135 respondents to our Bank Fee Analysis (BFA) Flash Survey spend in excess of $250,000 per year on bank services and maintain millions of dollars of deposits.
Second quarter results are in, and NDepth Bank Fee Analysis revealed that Insurance companies are earning well below market rate on their cash balances.
H.R. 2319/S. 1117 – The Importance of Restoring State and Local Government Access to Money Market Funds
New MMF regulations that were implemented in October 2016 are having major negative consequences for issuers and borrowers of debt held by money market funds. Specifically, Tax-Exempt MMFs (TE MMFs) are closing and assets are leaving. This is drying up a very important municipal financing conduit. Additionally, the flight of assets out of Prime MMFs is resulting in higher borrowing costs for municipalities as the pool of available capital decreases.