Corporations in the U.S. added $236B or 10% to their cash holdings during the third quarter according to data released by The Carfang Group and based in part on the December Federal Reserve Flow of Funds statements. This follows a $161B surge in the second quarter. Cash is now at an all-time high of $2.608T.
Innovation, technology, regulation and geopolitics are intersecting and are about to change the face of treasury, money and banking as never before. Issues that appear small or incremental today could be seismic in the longer term. As markets, institutions and governments deal with these cross-currents, we could be witnessing the beginning of a transformation on a grand scale in finance.
Differences in regulation, market structure, central bank policy and politics are pronounced. Although European treasurers and U.S. treasurers have much in common, these macro level differences can have a profound impact on corporate financial operations.
There seems to be a lot of revisionist history surrounding the financial crisis, its origins and its impacts. This analysis carefully analyzes the cash flows between asset classes and details a very explicits two year flight to quality that ultimately led investors and institutions to shun all but government guaranteed securities.
U.S. Treasury Dept requested comments on a proposal to begin issuing floating rate notes as a way to improve its funding strategies. We commented that such an instrument threaten the business of government money market mutual funds.
Since the financial crisis of 2007 and 2008, regulators around the world have been working diligently to strengthen policies to stabilize the global financial system and prevent or mitigate future crises. Policymakers are focused on several items to ensure regulatory changes attain their fundamental objectives.
The U.S. Dodd-Frank Act and the global Basel III regulations significantly change the playing field for banks and other financial institutions. We were invited to testify and help Congress understand the extensive but subtle implications.
The financial crisis was actually a combination of twenty six interrelated events, one feeding upon another. We document these events and show which were regulatory enforcement gaps, management failures, ratings lapses and public policy errors.
Governments worldwide supported their financial institutions during and following the crisis. In this testimony, the U.S. Senate sought to learn about the follow-on effects of such support and the advisability of limiting bailouts in the future.
The Volcker Rule section of the Dodd-Frank Act had a profound impact on capital markets, businesses and investors. It also impacted job creation. We were invited to help Congress better understand the repercussions.