treasury strategies’ quarterly corporate cash …...corporate cash briefing for 4q 2017 october...

© 2017 Treasury Strategies, A Division of Novantas, Inc.

A Division of Novantas, Inc.

Treasury Strategies’ Quarterly Corporate Cash Briefing for 4Q 2017

October 12, 2017


Agenda

2

Corporate Cash Levels

Emerging Topic on Payment Controls and Payment Fraud

Panelist Discussion

• Central Banks in 2017• Updates on MMF Reform (US, Europe)• LIBOR Update• Looking forward to 2018


160

180

200

220

240

260

280

Corp

orat

e Ca

sh (¥

T)

Japan Corporate Cash

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

Corp

orat

eCa

sh (€

T)

Eurozone Corporate Cash

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

Corp

orat

e Ca

sh ($

T)

US Corporate Cash

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Corp

orat

e Ca

sh (£

T)

UK Corporate Cash

4


Source: European Central Bank, Treasury Strategies

£0.72T

Source: Bank of Japan, Treasury Strategies

Source: Federal Reserve, Treasury Strategies

$2.3T

Source: UK Office for National Statistics, Treasury Strategies

€2.5T ¥267T


R² = 0.66

160

180

200

220

240

260

280

Corp

orat

e Ca

sh (¥

T)

Japan Corporate Cash

R² = 0.99

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

Corp

orat

eCa

sh (€

T)

Eurozone Corporate Cash

R² = 0.96

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

Corp

orat

e Ca

sh ($

T)

US Corporate Cash

R² = 0.96

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Corp

orat

e Ca

sh (£

T)

UK Corporate Cash

5



£0.72T



$2.3T

Source: UK Office for National Statistics, Treasury Strategies

€2.5T ¥267T

Slope = $19.2B/Q

Slope = €21.1B/Q Slope = ¥1.28T/Q

Slope = £7.1B/Q


Country/Region June 2000 June 2017

United States 9% 12%

Eurozone 13% 23%*

United Kingdom 22% 36%

Japan 34% 49%

*Eurozone corporate cash data lags other regions so data reflects March 2017Source: Treasury Strategies’ estimate

Corporate Cash as % GDP by Region

6


R² = 0.08

160

180

200

220

240

260

280

Japa

n Co

rpor

ate

Cash

(¥T)

Japan GDP (¥T)

Japan Corporate Cash relative to Japan Nominal GDP

R² = 0.95

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

EU C

orpo

rate

Cas

h (€

T)

EU GDP (€T)

EU Corporate Cash relative to EU Nominal GDP

R² = 0.97025

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

UK C

orpo

rate

Cas

h (£

T)

UK GDP (£T)

UK Corporate Cash relative to UK Nominal GDP

R² = 0.96

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

US C

orpo

rate

Cas

h ($

T)

US GDP ($T)

US Corporate Cash relative to US Nominal GDP

Corporate Cash Relative to Nominal GDP

7

Slope = $134B/$T Slope = £476B/£T

Slope = €414B/€T

Slope = ¥442B/¥T


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Bank

Res

erve

Bal

ance

at t

he E

CB (€

B)

Bank Reserve Balances at the ECB

0

50

100

150

200

250

300

350

Bank

Res

erve

Bal

ance

at t

he B

OJ

(¥T)

Bank Reserve Balances at the BOJ

0

50

100

150

200

250

300

Bank

Res

erve

Bal

ance

at t

he B

OE

(£B)

Bank Reserve Balances at the BOE

0

500

1,000

1,500

2,000

2,500

3,000

Bank

Res

erve

Bal

ance

at t

he F

ed ($

B)

Bank Reserve Balances at the US Federal Reserve

Reserve Balances



8

€1.77T

$2.21T £257B

¥319T


Source: Bank of England, Treasury Strategies


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www.TreasuryStrategies.com/NDepth

Payment Controls and Payments Fraud


How Prevalent is this Threat?

Where are Treasuries vulnerable?

It’s not a question of “If” you will be impacted. It’s a question of how significant an impact it will be.

11

“Government officials and security experts have long warned of the possibility of cyber disruptions in the financial system and other essential services and utilities.”

Xoom Corp. CFO resigns after fraudsters steal $30.8M in corporate cash (“the email”)- San Francisco Business Times

Bangladesh Central Bank Found $100 Million Missing After a Weekend BreakWall Street Journal


Types of Payment Fraud

Check fraud• Altered checks• Forgeries• Counterfeit checks• Remotely-created checks• Lockbox scam• Etc.

Electronic fraud (Unauthorized ACH/Wire)• Corporate account takeover• Check conversion counterfeits• Social engineering – Phishing/Spear Phishing• Keystroke software• Password engineering – (birthdays, Fido1234)• Etc.

Credit Card & P-card

12


What To Do

Identify and Understand - Risk Assessment

Improve – Control Optimization

Manage – Cyber Security Policies, Procedures, Insurance, Eliminate

Monitor – Continuous Assessment and Scenario Testing

Communicate and Educate

13

Panelist Discussion


Meet Our Speakers

Tony CarfangManaging Director+1 [email protected]

Kevin RuizPrincipal+1 [email protected]

15

Susan HillSenior Portfolio Manager+1 [email protected]

Michelle PriceAssociate Policy and Technical Director+44 (0) 20 7847 [email protected]

Roger MerrittManaging Director+1 [email protected]


About Treasury Strategies

Treasury Strategies, A Division of Novantas, Inc., is the leading treasury consulting firm. Armed with decades of experience, we’ve developed solutions and delivered insights on leading practices, treasury operations, technology, and risk management for hundreds of companies around the globe.

We serve corporate treasurers, their financial services providers and technology providers for the complete 360° view of of treasury.

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www.TreasuryStrategies.com/content/networkingcommunities11

@TreasuryStrat

www.youtube.com/c/treasurystrategiesincconsulting

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• Global Cash and Liquidity Management• Cash Forecasting• Financial Risk Management• Treasury Organization • Payments Strategy• Leading Practices Review and Benchmarking

Connect With Us

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About the ACT

Who We AreThe Association of Corporate Treasurers (ACT) sets the benchmark for international treasury excellence. As the chartered body for treasury, we lead the profession through our internationally recognised suite of treasury qualifications, define standards and support continuing professional development. We are the voice of corporate treasury representing the interests of our members.

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What We DoACT supports the growth and professional development of treasurers and finance professionals. We are an active global network of treasury, risk and finance professionals with members and students in 98 countries.

• We promote treasury as a discipline, as a profession and as a career.

• We provide informed and unbiased technical advice.

• We teach, examine and qualify treasury professionals and offer ongoingCPD.

• We stimulate debate and facilitate the exchange of ideas and information through our events, conferences, webinars and forums.

• We represent the real economy and influence relevant regulation and market practice. youtube.com/treasurersorg

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twitter.com/actupdate

www.treasurers.org


About Federated Investors, Inc.

18

L i q u i d i t y M a n a g e m e n t

§ Pioneer in liquidity management for more than 40 years and one of the largest institutional money market fund managers in the industry*

§ 34 liquidity management professionals with 19 years working together at Federated

§ Have never bought a security out of or infused capital into a money market fund to maintain a stable $1.00 NAV

• Prime• Government

• Tax-Free• Non-U.S Domiciled

Equity Management

§ Independent investment teams each focused on a specific style or approach with commitment to proprietary research

§ Portfolio managers average 23 years of experience, nearly 11 with Federated

§ Strategies are a result of both carefully cultivated homegrown initiatives as well as key strategic acquisitions

• Value (Clover)• International Equity• Dividend Oriented

• Quantitative (MDT)• Growth/Income• Growth (Kaufmann)

• Balanced/Macro• Alternatives (Prudent Bear)• Managed Risk

F i x e d - I n c o m e M a n a g e m e n t

§ Experienced, specialized teams with strength across the yield curve

§ Portfolio managers average 25 years of experience, nearly 18 with Federated

§ Modular process is portable across fixed-income styles and lends itself to portfolio customization

• Multi-Sector: Active Cash, Short, Intermediate• Sector Specific: Corporate, High-Yield, Emerging Markets, Trade Finance, Municipals

Founded: 1955

Headquarters: Pittsburgh

Global Operations: New York, Rochester, Boston, Houston, Dublin, Frankfurt, London and Tokyo

AUM: Approximately $355 billion

Ownership: § Publicly traded, privately held (NYSE: FII)

§ 20% employee ownership

Revenue Distribution Equity 46%

Liquidity 32%

Fixed-income 22%

RepresentativeClients

• Corporate/Public Defined Benefit

• Defined Contribution

• Endowment/Foundation

• Taft-Hartley

• Insurance

• Sub-Advisory

• Local Government Investment Pools (LGIP)

• Financial Intermediaries

All information is as of 3/31/15 unless stated otherwise.*Source: iMoneyNet, Inc. February 28, 2015

Delivering investment solutions since 1955


About Fitch Ratings

Fitch Ratings is a leading provider of credit ratings, commentary, and research. Dedicated to providing value beyond the rating through independent and prospective credit opinions, Fitch Ratings offers global perspectives shaped by the strong local market experience and credit market expertise. The additional context, perspective and insights we provide help investors to make important credit judgments with confidence.

Fitch Group is a global leader in financial information services with operations in more than 30 countries. In addition to Fitch Ratings, the group includes Fitch Solutions, an industry-leading provider of credit risk products and services, and Fitch Learning, a preeminent training and professional development firm. Fitch Group is jointly owned by Paris-based Fimalac, S.A. and New York-based Hearst Corporation.

For additional information, please visit www.fitchratings.com.

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treasury strategies’ quarterly corporate cash …...corporate cash briefing for 4q 2017 october...

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