The Implications of Regulatory Reform For Your Cash: Life after Money Market Reform, Basel III and Dodd-Frank

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Life after Money Market Reform, Basel III and Dodd-Frank

Key Concepts

Standish believes the environment of ultra-low yields, low reward for credit and duration risk in the very short end of the yield curve could change within the next 2 years:

  • New Bank and Money Market regulations are likely to change both yield and liquidity dynamics going forward.
  • The adjustment could be exacerbated by the end of zero interest rate policy (ZIRP).
  • The new environment should favor Separately Managed Accounts (SMAs) as a complement to traditional cash management vehicles such as Bank Deposits and Money Market Funds:
  • As a risk-mitigation tool, diversifying sources of liquidity.
  • As a fee-efficient, fully customizable strategy positioned to benefit from potential increased yield opportunities.

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