Treasury departments need to prioritize automation | Fed modifies Main Street Lending Program criteria | Identifying liquidity risks key to cash management
June 11, 2020
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Treasury departments need to automate and streamline in order to better manage risk, support remote access and connect colleagues who are working outside the office, according to the Association of Corporate Treasurers. Updating technology such as cloud-based systems and online trading tools should be a priority.
Full Story: Bloomberg Professional Services (6/10) 
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The Federal Reserve has eased lending conditions of the Main Street Lending Program by cutting the minimum loan value to $250,000 and by extending the repayment term to five years from four. In a further move, the Fed will purchase a fixed 95% of all loans under the program, rather than covering a range between 85% and 95%.
Full Story: Reuters (6/8),  The Wall Street Journal (tiered subscription model) (6/8) 
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Analysis, reliable projections and taking action are among the best steps to take in managing cash during the coronavirus pandemic. "Equipping yourself with the best possible information around current and future liquidity risks puts you in the best position to identify the magnitude of change your business will need," according to Cohen & Company.
Full Story: Crain's Detroit Business (tiered subscription model) (6/8) 
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Payments fraud has been added to the list of areas corporate treasurers must manage during the coronavirus pandemic. The pandemic has put fraud and hacking activity into overdrive.
Full Story: Treasury Today (free registration) (6/1) 
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Bank of America Insights
Bank of America's experts provide insights on the profound economic impact of the coronavirus pandemic and what a recovery may look like. The spread of the virus, jobless numbers and equities markets are all key areas to monitor.
Full Story: Bank of America (5/11) 
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A wave of fintech innovation in recent years has not been able to address the massive trade finance gap. Fragmentation and complexity remain major obstacles to widespread digitization, though digitization is happening in some areas.
Full Story: PYMNTS (6/1) 
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Industry News
The US economy entered a recession in February, marking the end of the 128-month expansion that began in 2009. The Business Cycle Dating Committee of the National Bureau of Economic Research said it has "concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions."
Full Story: Reuters (6/8),  The Wall Street Journal (tiered subscription model) (6/8) 
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Tax authorities are likely to watch closely as multinationals make loans between entities and use higher interest rates to lower their tax bills. "The current volatility in yields could lead tax authorities to later argue that taxpayers took advantage of extraordinary economic circumstances to maximize the interest rate on an intercompany loan," said Sherif Assef of KPMG.
Full Story: Bloomberg Professional Services (6/4) 
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Economists are anticipating a spike in bankruptcies among small- to medium-sized businesses due to the coronavirus pandemic and its economic toll, a trend that could have a chilling effect on lending. "My hope is banks don't use the same cycle they did after 2008, and that they take a more human approach," said Snehal Fulzele of Q2.
Full Story: PYMNTS (6/9) 
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Spotlight on Trade Finance
A US move to end Hong Kong's economically privileged status might prompt global corporations to move treasury operations to Southeast Asia, bankers say. "Companies' treasury operations follow trade flow, and now there are many questions around Hong Kong's status as a trade hub," a Hong Kong-based banker involved in trade finance says.
Full Story: Reuters (6/3) 
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Bank of America's Global Transaction Services (GTS) business provides comprehensive global treasury solutions across the breadth of the working capital cycle, including liquidity management, payments and receipts, commercial card, foreign exchange and trade and supply chain finance. With a history spanning more than 230 years, GTS services thousands of clients - small businesses, mid-size companies, large corporations, financial institutions and public sector entities - in more than 200 countries and 140 currencies.
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