Businesses Brace to Shift Funds on TAG Expiration

AFP survey shows half of companies would move money from banks to money funds, Treasuries.

While the U.S. Senate plans to considers legislation today that would extend unlimited coverage for certain bank accounts for another two years, a survey shows that if that coverage expires, companies plan to shift considerable sums out of bank accounts.

An Association for Financial Professionals survey of more than 1,300 corporate finance professionals shows that 51% say they would shift some balances out of bank accounts if the Transaction Account Guarantee (TAG) program providing unlimited coverage for non-interest-bearing accounts expires as scheduled on Dec. 31. The companies that plan to move money would shift a median of 20% of their deposits.

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