The Changing Nature of Cash
Source : Charities Management MagazinePublish Date : 16/04/2007
Author : Marc Hendriks
Money market funds are changing the risk of cash. Charities should therefore take note of the developments within the world of money markets. These developments will confront charity treasurers with both risks and opportunities. Getting decisions right and emerging unscathed will depend largely on the skills of cash fund managers and the ability of charity treasurers to choose the most appropriate ones.
The sharp fall in equity values in 2000 and 2001, an inverted yield curve and soaring profits at corporations have served to increase sharply cash holdings by both investors and corporations. Banks, unwilling to accept a liability driven expansion of their balance sheet, have responded by encouraging the growth of money market funds.
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