functions “will need to respond
by changing role definitions,
performance expectations, and
hiring plans.”
Banking relationships. Some
treasury consultants point to
declining levels of satisfaction
with banking partners’ pay-ments-related services. Given
the need for increased speed
and treasury functions’ drive
to improve end-to-end payment
processes, some banking relationships are “creating levels
of friction not seen in recent
times,” Jeffery observes.
Adjusting Investment
Priorities and Policies
Given the variety of internal and
external issues currently challenging
cash management activities, it is not
surprising that corporate treasurers
continue to favor approaches and investment allocations that safeguard
principal and increase immediately
available liquidity.
The investment priorities that this
year’s survey respondents identified
are notable in that they illustrate an
even stronger desire to protect prin-
cipal—that is the top short-term in-
vestment goal in this year’s results
(and the third-highest priority in
the 2018 results). The proportion of
respondents who selected “eliminat-
ing any chance of lost value in prin-
cipal” as their top priority doubled in
2019. “Understanding and mitigating
the impact of geopolitical uncertain-
ty” is also the top priority for a far
larger proportion of 2019 respondents
(16 percent) than 2018 respondents
( 6 percent). “I think the priority of
‘eliminating any chance of lost value
in principal’ may move even higher
if uncertainty in the business climate
increases over the coming months,”
Nguyen says. See Figure 4.
As treasury groups in global companies work through these priorities,
they are not planning to repatriate
a lot of funds. Among the respondents whose companies have cash or
short-term investments overseas, 64
10 TREASURY&RISK NOVEMBER 2019 SPECIAL REPORT treasuryandrisk.com
STOCKPILING CASH
(cont’d from page 7)
2019
weighted
ranking
2019 - respondents
selecting as 1st priority
2018 weighted
ranking
2018 - respondents
selecting as 1st priority
Eliminate any chance of lost value in principal 1 43% 3 20%
Maximize liquidity available immediately 2 16% 1 29%
Maximize yield 3 19% 2 31%
Minimize counterparty credit risk 4 2% 5 2%
Understand and mitigate impact of geopolitical
uncertainty
5 16% 6 6%
Minimize currency impact on cash earned abroad 6 5% 4 12%
Figure 4: Over the next year, how will your organization prioritize each of the
following goals for cash and short-term investments?
Source: “2019 Cash Management Survey,” Treasury & Risk.