Deep Pockets, Getting Deeper

U.S. companies continue to stockpile cash, and have no plans to change.

U.S. companies continue to hoard record levels of cash. And over the next 12 months, most don’t plan on changing that practice, according to a survey released in July by the Association for Financial Professionals (AFP) and Credit Suisse Asset Management. Nearly half (49 percent) of the treasurers and other executives surveyed say they expect their companies to maintain current cash balances over the next 12 months. Another 27 percent say they will increase their cash reserves. Jeff Glenzer, director of treasury services at the AFP, says cash stockpiling suggests a lack of investment opportunities. “It can be seen as a barometer of how corporations view the economic climate,” he says. The survey also finds that many companies are lax about creating an investment policy for cash and that they don’t diversify their cash holdings.

Discuss

Your email address will not be published. Required fields are marked *