An evolving macroeconomic climate poses a far greater risk to liquidity and idle cash than ever before, and treasuries must explore new ways to instil robust tools to provide sufficient liquidity and protect the underlying value of cash. And whilst this advice has existed for some time, the paradigm shift within treasury has now latched onto the broader technology capabilities on offer to drive real change.
Money market funds are ideal for treasuries given they are guided by a conservative mantra with capital preservation, daily liquidity and the added benefit of daily yields, delivering a powerful cash management tool. An enhanced repertoire to manage liquidity is becoming more desirable and money market funds fit neatly into the strategic objective of an increasing number of treasury operations.
In the modern fast-paced capital markets, every second counts. Imagine executing a trade in Frankfurt, affirming it in Luxembourg, and seeing assets delivered in a matter of hours.
That’s the promise of the emerging rollout of T+1 Settlement across the European Union and UK. Slated for full effect by October 2027, this regulatory leap doesn’t just align the European markets with heavyweight counterparts such as the US, Canada and India; it rewrites the pace and risk profile of securities trading across the entire continent.