After a number of companies had to scramble to place sterling and euro cash at year-end 2012, and there being some pressure at end 2013, ACT Policy & Technical have the impression that more attention from all sides has meant 2014 year-end has seemed unremarkable.
In particular, companies with significant cash put in more effort towards planning internally and with their banks. Banks seem to have done a better job communicating their likely positions and rather earlier than in previous years. There were few surprises among major banks as to those willing to be helpful and those not – treasurers would know well how to populate the two groups.
From the end of September, P&T had again encouraged companies to start dialogues with their banks on the year end. The Bank of England keeps a friendly eye on the sterling market and we took a number of companies into the Bank in early December to give them idea of how it was shaping up.
Early in January it seemed to have gone quite well as, for the first time in recent years, P&T had no treasurers dropping us an e-mail or phoning in to tell us of particular problems. So, we asked a 100 companies how it went. Having given them only a few hours to respond (my bad time management), we were very pleased to receive 30 replies from firms ranging in size from larger SMEs to global giants. Many thanks to the respondents.
Most responses included the words “no problems” and many referred to better planning and communication with banks. Here are some of the comments, to give you a flavour.
Quite a few firms said that as part of their planning they had made more use of money funds for the year-end period. For example
We had been told by several companies late last year that US regionals and East Asian, notably Chinese, banks were soliciting year-end deposits and this was confirmed.
One global firm (that was not in our sample) had told us previously that they had passed a lot of European/UK cash to their US treasury operation that had had no difficulty in placing it.
So how was year-end 2014 for you? Do drop us a line and let us know at technical@treasurers.org.
We don’t think that complacency should set in. More new bank regulations will be coming into effect/anticipated by banks that might change behaviour. What will that do to capacity? Will money funds still be as flexible – after all they put a lot of money with banks themselves?
Early planning will still be needed.