Investing Cash

Why treasurers need to be SLY
Corporate investment of liquid funds and Bank counterparty credit assessment

Press Release

London

27 March 2009

When managing liquid funds, the corporate treasurer’s mantra is SLY – security, liquidity, yield – in that order. This is the basis of a briefing note from The Association of Corporate Treasurers (ACT) on Corporate Investment of Liquid Funds which is at the heart of the treasurer’s job to provide funds in the right amount in the right place at the right time.

A further briefing note issued by the ACT covers Bank Counterparty Credit Assessment for Companies. Assessing bank credit risk from scratch is a difficult and time consuming process but knowing the credit standing of the bank is essential as part of establishing credit limits and conditions for dealing with the bank. Companies also need to be aware of the bank’s ongoing ability to maintain lending and where costs of borrowing will be linked to the bank’s own cost of funds. The briefing note provides a step-by-step guide including information on using credit ratings.

The full notes can be found at www.treasurers.org/investingcash.

Stuart Siddall, ACT Chief Executive, said

 Treasury management is as important for an Aim listed company as it is for a FTSE 100 company with a strong treasury team – both can lose money if they are not paying attention.

Treasury management should have shot to the top of Board agendas. These guidance notes will help non-executive directors to assess the effectiveness of their company’s policies. 

---------- Ends ----------------

Notes to editors

For further information on the ACT, or to commission and article, please visit the ACT Press Room.