Business Strategy: Liquidity

This IDC Financial Insights report looks at short-term liquidity levels and provides some insight into how liquidity management has evolved and how what we are seeing is a predictable outcome of financial uncertainty. Liquidity management has evolved beyond tracking positions, allocating investments, and complying with investment policies. Treasurers now must also think strategically about their cash balances in this unpredictable and unfriendly investment environment. We have observed that treasurers have become increasingly conservative and have shored up their short-term investment balances to stay highly liquid and minimize risk.

According to Jeanne Capachin, research vice president, Corporate Treasury and Spending Guides, "There are indications that the trend to increase liquidity is tailing off. North American corporations are adjusting to a more favorable economic outlook and are planning to make strategic investments in the coming six months."