2016 AFP Liquidity Survey
The Association for Financial Professionals, an organization of corporate treasurers, issued a press release on its "2016 AFP Liquidity Survey" entitled, "Vast Majority of Treasury Professionals Value Their Bank Relationships." It states, "Relationships matter -- especially in corporate treasury and finance. According to the 2016 AFP Liquidity Survey, underwritten by State Street Global Advisors (SSGA), 90 percent of treasury and finance professionals cite their overall relationship with their bank as an important determinant when choosing a bank in which to invest their short-term cash. This is the first time in the 11 years AFP has conducted the Liquidity Survey that finance professionals have indicated their relationship with their bank plays a more important role when selecting their banking partner than the bank's credit ratings, signaling a stronger confidence in the banking industry. In addition, 85 percent of survey respondents cited banks as resources their organizations use to access information about operating cash and short-term investment holdings. This a further endorsement to their confidence in their banking partners. The results were drawn from 787 respondents. Full results are available at http://www.afponline.org/liquidity/. Other key findings include: 71 percent of organizations with cash and short-term investment holdings outside the United States maintain most of their holdings in bank-type investments, including certificate of deposits and time deposits; 55 percent of corporate cash holdings are maintained at banks; Safety of principal continues to be a top priority among investment objectives. The share of treasury and finance professionals reporting safety as a top objective increased from 65 percent in 2015 to 68 percent in 2016; With the SEC ruling on money funds taking affect this October, 62 percent plan to make changes in how they invest in prime funds. "Bank relationships continue to grow in level of strategic importance for organizations," said Jim Kaitz, president and CEO of AFP. "Bank deposits continue to hold the majority of corporate cash and short-term investments, and banks also play a role as sponsor of both onshore and offshore money market funds held by organizations." Yeng Felipe Butler, Head of SSGA's Global Cash Business, comments, "State Street Global Advisors (SSGA) is pleased to once again partner with the AFP to sponsor the Liquidity Survey." AFP provided some more commentary on the survey in a summary PDF. It says, "Finance professionals have remained cautious about holdings outside the U.S. Only 42 percent of organizations made few changes to their cash and investment balances outside the U.S. from May 2015 to May 2016, while 58 percent of finance professionals report that in the past year their organizations' investments outside the U.S. were unchanged. Seventy-three percent of organizations have a written investment policy that dictates their short-term investment strategy.... Thirty percent of survey respondents indicate that their organizations' most important cash investment objective is liquidity. As safety and liquidity remain the top two investment objectives for companies, yield continues to be a distant third." Look for full coverage of the Survey in our "News" tomorrow.
