Cash & Liquidity Management
Published  7 MIN READ
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Mission Critical: Keep Liquidity Flowing

by Suzanne Janse van Rensburg, Regional Head of Liquidity, Global Transaction Services EMEA, Bank of America Merrill Lynch

Liquidity is what keeps companies afloat. In order to meet their obligations, corporate treasurers need to have the right cash in the right place, at the right time. Equally, treasurers need to make the most of internal sources of cash in order to reduce external funding needs, mitigate risks and, when possible, invest cash effectively. In order to achieve these goals, treasurers aim to gain more visibility and control over their liquidity, free up trapped balances in regulated markets and obtain the best possible return on excess cash.

This is nothing new. What has changed, however, is the regulatory, geopolitical and macroeconomic environment in which companies operate. Local market conditions and global regulatory developments can affect companies’ liquidity management choices and pose significant challenges. At the same time, some recent developments are providing companies with opportunities to manage their liquidity more effectively.

Global dynamics

The broader a company’s geographical footprint, the more challenging it is to manage liquidity effectively around the world. However, technology can help companies overcome these challenges. As more companies adopt a global operating model, they are using increasingly sophisticated tools to manage their liquidity. These tools can provide more readily accessible data, from consolidated balance information to a clear view of counterparty exposures. Technological development has also led to increased levels of automation, greater visibility and more effective centralisation of cash and liquidity management.