BNY Mellon on LiquidityDirect
BNY Mellon published the piece, "A Panoramic View for Treasurers" in its latest "Aerial View. They explain, "The pandemic highlighted the need among cash managers for automated workstations, with real-time feeds, analytics and a broader swath of investment choices.... Although some calm returned to markets and there was a significant reversal out of government money market funds, the stark realities of the COVID-19 market meltdown altered treasurers' methods of cash forecasting and investing forever, much like the changes that were made in the aftermath of the 2007-2009 financial crisis for different reasons." The article, published for this week's AFP Conference in Washington, continues, "Last year, treasury and risk management platform provider GTreasury collaborated with BNY Mellon's LiquidityDirect short-term investing portal to give clients greater visibility into their cash, counterparties and money market fund positions across multiple time zones.... BNY Mellon Treasury Services, for example, this year delivered an array of new global liquidity management solutions that support clients’ needs to efficiently manage counterparty and currency risk, as well as optimize liquidity across all providers. Other trends coming into play are the greater use of 'virtual accounts' and faster payment systems. [T]reasurers in the U.S. have been starting to use them as a way of consolidating their banking relationships and reducing cash sweeps between standard bank accounts. Separately, there are opportunities in portfolio optimization and tools for tracking environmental, social and governance (ESG) investing. This fall, BNY Mellon added a host of new products to its LiquidityDirect portal, including an ESG data analytics app, cleared repo, commercial paper, brokered certificates of deposit and short-duration exchange-traded funds (ETFs)." BNY Mellon adds, "Ultra-short duration ETFs held $130 billion in assets as of September 30, according to Bloomberg, up 11% in the past year, whereas assets in institutional and offshore money market funds grew 6%.... In the months ahead, LiquidityDirect, which processed $9.85 trillion in transaction flows in the 12 months ended September 30, will cater to investments in mutual funds and FDIC-insured deposits offered through the ICS and CDARS banking networks. The moves are taking the portal from one historically dedicated to money market funds to one that delivers a broad range of investment options integrated with the bank's collateral management, treasury services and custody platform, all from one central repository. These enhancements have helped the amount of cash deposited into LiquidityDirect to grow 65% since January 1, 2020, compared to 38% for assets into institutional and offshore money market funds. 'The move to virtual environments in the pandemic highlighted what was ripe for change in treasury workflows, and the opportunities to advance digital ecosystems are endless,' says George Maganas, head of Margin and Liquidity Services at BNY Mellon."
