1ProprietaryandConfidential 1Proprietary and Confidential to Treasury Strategies, a division of Novantas, Inc. May not be used or distributed without our written permission.
January 11, 2018
Approved for up to 1.2 CTP/CCM or FP&A recertification credits by the Association For Financial for Financial Professionals
Treasury Strategies’ Corporate Cash BriefingTM
2ProprietaryandConfidential 2
1. Corporate Cash Levels
2. A Conversation on China in 2018
3. Panelist Discussion• TheFutureofLIBOR
• RatesandInflationin2018
• U.S.TaxReformandItsImplications
TODAY’S AGENDA
3ProprietaryandConfidential 3
CORPORATE CASH LEVELS
4ProprietaryandConfidential 4
Corporate Cash Levels
US CORPORATE CASH UK CORPORATE CASH
EUROZONE CORPORATE CASH JAPAN CORPORATE CASH
0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4
Cor
pora
te C
ash
($T)
$2.4T
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Cor
pora
te C
ash
(£T)
£0.73T
0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6
Cor
pora
teC
ash
(€T)
€2.5T
160
180
200
220
240
260
280
Cor
pora
te C
ash
(¥T)
Source:EuropeanCentralBank,TreasuryStrategies Source:BankofJapan,TreasuryStrategies
Source:FederalReserve,TreasuryStrategies Source:UKOfficeforNationalStatistics,TreasuryStrategies
¥271T
5ProprietaryandConfidential 5
Corporate Cash Levels
US CORPORATE CASH UK CORPORATE CASH
EUROZONE CORPORATE CASH JAPAN CORPORATE CASH
$2.4T £0.73T
€2.5T
Source:EuropeanCentralBank,TreasuryStrategies Source:BankofJapan,TreasuryStrategies
Source:FederalReserve,TreasuryStrategies Source:UKOfficeforNationalStatistics,TreasuryStrategies
¥271T
Slope=$20.3B/Q
R² = 0.95
0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4
Cor
pora
te C
ash
($T)
R² = 0.96
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Cor
pora
te C
ash
(£T)
Slope=£7.0B/Q
R² = 0.99
0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6
Cor
pora
teC
ash
(€T)
Slope=€23.5B/Q
R² = 0.67
160
180
200
220
240
260
280
Cor
pora
te C
ash
(¥T)
Slope=¥1.22T/Q
6ProprietaryandConfidential 6
Country/Region September2000 September2017
UnitedStates 9% 12%
Eurozone 13% 23%*
UnitedKingdom 23% 36%
Japan 36% 49%
*Eurozonecorporate cashdatalagsotherregionssodatareflectsSeptember2017Source:TreasuryStrategies’estimate
Corporate Cash as % GDP by Region
7ProprietaryandConfidential 7
Corporate Cash Relative to Nominal GDP
US CORPORATE CASH RELATIVE TO US NOMINAL GDP
EUROZONE CORPORATE CASH RELATIVE TO EUROZONE NOMINAL GDP JAPAN CORPORATE CASH RELATIVE TO JAPAN NOMINAL GDP
R² = 0.96
0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6
US
Cor
pora
te C
ash
($T)
US GDP ($T)
Slope=$138B/$T
R² = 0.97002
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
UK
Cor
pora
te C
ash
(£T)
UK GDP (£T)
UK CORPORATE CASH RELATIVE TO UK NOMINAL GDP
Slope=£477B/£T
R² = 0.96
0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6
EU C
orpo
rate
Cas
h (€
T)
EU GDP (€T)
Slope=€355B/€T
R² = 0.11
160
180
200
220
240
260
280
Japa
n C
orpo
rate
Cas
h (¥
T)
Japan GDP (¥T)
Slope=¥468B/¥T
8ProprietaryandConfidential 8
Corporate Cash Levels
0
500
1,000
1,500
2,000
2,500
3,000
Ban
k R
eser
ve B
alan
ce a
t the
Fe
d ($
B)
0
50
100
150
200
250
300
Ban
k R
eser
ve B
alan
ce a
t the
B
OE
(£B
)
0 200 400 600 800
1,000 1,200 1,400 1,600 1,800 2,000
Ban
k R
eser
ve B
alan
ce a
t the
EC
B (€
B)
0
50
100
150
200
250
300
350
Ban
k R
eser
ve B
alan
ce a
t the
B
OJ
(¥T)
BANK RESERVE BALANCES AT THE US FEDERAL RESERVE BANK RESERVE BALANCES AT THE BOE
BANK RESERVE BALANCES AT THE ECB BANK RESERVE BALANCES AT THE BOJ
Source:EuropeanCentralBank,TreasuryStrategies Source:BankofJapan,TreasuryStrategies
Source:FederalReserve,TreasuryStrategies Source:UKOfficeforNationalStatistics,TreasuryStrategies
$2.29T £245B
€1.85T ¥327T
9ProprietaryandConfidential 9
1. Participate in our 12th Annual State of theTreasury Profession Surveyhttps://www.research.net/r/SOTP18_LI
2. Register for the Jan 25th State of the TreasuryProfession Webinarhttps://www.treasurystrategies.com/events/12th-annual-state-of-the-treasury-profession-webinar/
Stay Tuned
10ProprietaryandConfidential 10
CHINA IN 2018
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China in 2018
Dinny McMahonFellow/Author
China’sGreatWallofDebt:ShadowBanks,GhostCities,MassiveLoans,andtheEndoftheChineseMiracle
https://www.amazon.com/Chinas-Great-Wall-Debt-Massive/dp/1328846016
“AstunninginsidelookathowandwhythefoundationsuponwhichChinahasbuilttheworld’ssecondlargesteconomy,havestartedtocrumble.”
• FellowatMacroPolo,aChina-focusedthinktankinChicago• FormerFinancialJournalist,WallStreetJournal,BeijingandDowJonesNewswires, Shanghai• FormerContributor, FarEasternEconomicReview• FormerFellow,WoodrowWilsonInternationalCenterforScholars,WashingtonDC
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PANELIST DISCUSSION
13ProprietaryandConfidential 13
Meet Our Speakers
TONY CARFANGManagingDirector
JOO-YUNG LEEManagingDirector
KEVIN RUIZPrincipal
MICHELLE PRICEAssociatePolicyandTechnicalDirector
DEBBIE CUNNINGHAMChiefInvestmentOfficer
+44(0)[email protected]
14ProprietaryandConfidential 14
About Treasury Strategies
• GlobalLiquidityManagementStructures• CashForecasting• FinancialRiskManagementandControls• TreasuryOrganization• PaymentsStrategy• LeadingPracticesReviewandBenchmarking
• BankRelationshipManagementSupport• BankFeeAccountAnalysisSolution- NDepth Product• TechnologyOptimization,SelectionandImplementation• MerchantCardandPurchasingCardProgram• TreasuryChangeManagementandResourceSupport• PolicyandProcedureReview
TreasuryStrategies,adivisionofNovantas,Inc.,istheleadingtreasuryconsultingfirm.Armedwithdecadesofexperience,we’vedevelopedsolutionsanddeliveredinsightsonleadingpractices,treasuryoperations,technology,andriskmanagementforhundredsofcompaniesaroundtheglobe.WeservecorporateTreasurers,theirfinancialservicesprovidersandtechnologyprovidersforthecomplete360° viewoftreasury.
AREAS OF EXPERTISE
TreasuryStrategies.com/content/networkingcommunities11 @TreasuryStrat youtube.com/treasurystrategiesincconsulting
15ProprietaryandConfidential 15
About the ACT
ACTsupportsthegrowthandprofessionaldevelopmentoftreasurersandfinanceprofessionals.Weareanactiveglobalnetworkoftreasury,riskandfinanceprofessionalswithmembersandstudentsin98countries.
• Wepromotetreasuryasadiscipline,asaprofessionandasacareer.
• Weprovideinformedandunbiasedtechnicaladvice.
• Weteach,examineandqualifytreasuryprofessionalsandofferongoingCPD.
• Westimulatedebateandfacilitatetheexchangeofideasandinformationthroughourevents,conferences,webinarsandforums.
• Werepresenttherealeconomyandinfluencerelevantregulationandmarketpractice.
TheAssociationofCorporateTreasurers(ACT)setsthebenchmarkforinternationaltreasuryexcellence.Asthecharteredbodyfortreasury,weleadtheprofessionthroughourinternationallyrecognisedsuiteoftreasuryqualifications,definestandardsandsupportcontinuingprofessionaldevelopment.Wearethevoiceofcorporatetreasuryrepresentingtheinterestsofourmembers.
WHAT WE DO
treasurers.org youtube.com/treasurersorgtreasurers.org/linkedin @actupdate facebook.com/actupdate
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About Federated Investors, Inc. | Delivering Investment Solutions Since 1955
Federatedhashoneditsdisciplinedinvestmentprocessoverahalf-centurytodeliverstyle-consistentinvestmentproducts,including119domesticandinternationalequity,fixed-incomeandmoneymarketfunds,aswellasavarietyofseparatelymanagedaccounts.Federated's diversifiedproductlineisdistributedthroughapproximately8,500financialintermediariesandinstitutionswhoassistinvestorsinmeetingtheiruniqueobjectives.
• EquityManagemento Independentinvestmentteamseachfocusedonaspecificstyleorapproachwithcommitmentto
proprietaryresearch
o Portfoliomanagersaverage23yearsofexperience,nearly11withFederated
o Strategiesarearesultofbothcarefullycultivatedhomegrowninitiativesaswellaskeystrategicacquisitions
• Fixed-IncomeManagement
o Experienced,specializedteamswithstrengthacrosstheyieldcurve
o Portfoliomanagersaverage25yearsofexperience,nearly18withFederated
o Modularprocessisportableacrossfixed-incomestylesandlendsitselftoportfoliocustomization
• LiquidityManagemento Pioneerinliquiditymanagementformorethan40yearsandoneofthelargestinstitutionalmoney
marketfundmanagersintheindustry*
o 34liquiditymanagementprofessionalswith19yearsworkingtogetheratFederated
o Haveneverboughtasecurityoutoforinfusedcapitalintoamoneymarketfundtomaintainastable$1.00NAV
Since1955,millionsofinvestorsintheUnitedStatesandaroundtheglobehavereliedonFederatedInvestors,Inc.(NYSE:FII)forworld-classinvestmentmanagement.Federatedhasgrowntobecomeoneofthenation'slargestinvestmentmanagerswith$363.7billioninassetsundermanagement.
WHAT WE DO
Allinformationisasof3/31/15unlessstatedotherwise.*Source:iMoneyNet,Inc.February28,2015
17ProprietaryandConfidential 17
About Fitch Ratings
FitchRatingsisaleadingproviderofcreditratings,commentary,andresearch.Dedicatedtoprovidingvaluebeyondtheratingthroughindependentandprospectivecreditopinions,FitchRatingsoffersglobalperspectivesshapedbythestronglocalmarketexperienceandcreditmarketexpertise.Theadditionalcontext,perspectiveandinsightsweprovidehelpinvestorstomakeimportantcreditjudgmentswithconfidence.
WHAT WE DO
Foradditionalinformation,pleasevisitwww.fitchratings.com.
FitchGroupisagloballeaderinfinancialinformationserviceswithoperationsinmorethan30countries.InadditiontoFitchRatings,thegroupincludesFitchSolutions,anindustry-leadingproviderofcreditriskproductsandservices,andFitchLearning,apreeminenttrainingandprofessionaldevelopmentfirm.FitchGroupisjointlyownedbyParis-basedFimalac,S.A.andNewYork-basedHearstCorporation.
18ProprietaryandConfidential 18
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