Low and even negative interest rates are posing challenges to corporate treasurers, according to recent Economist Intelligence Unit research, Managing Risk in Challenging Economic Times, sponsored by Deutsche Bank.
The EIU’s global survey of 150 treasurers and 150 CFOs noted that, because of the prevailing interest rate environment, half of the respondents have found management of corporate investment portfolios to be more time-consuming over the past 12 months.
One fifth of treasurers said that they had either no cash or low levels of cash. Almost half of those treasurers (46%) said that negative interest rates were the reason for that, while more than half (54%) said they were “focusing on using cash to pay bills, creditors and suppliers as early as possible”.
The top four areas that have increased demands on respondents’ time were:
- Management of investment portfolios (50%)
- Sufficient management of working capital (40%)
- Relationship management with banks and suppliers (39%)
- Implementation of low-cost financing (30%)
Almost 90% said that their company’s treasury department had a growing role in supply chain finance while a similar proportion said that treasury had a growing role in working capital management.