Companies in Europe are starting to cut the record amounts of cash they accumulated since the financial crisis but they're not spending it the way central bankers hoped they would.

Corporate treasurers cracked open their war chests after cash holdings for the region's biggest companies swelled to a peak of 697 billion euros ($761 billion) in June 2015, according to data compiled by Bloomberg. But instead of spending the money to expand, companies are shifting it into short-term securities, the data show.

Treasurers are rethinking their investment strategies after the European Central Bank cut its main interest rate to negative this year, effectively charging lenders to park their corporate clients' money in its vaults. With bond yields pushed to record lows and economic turmoil damping the allure of expansion or takeover plans, companies in Europe are looking for ways to reduce the cost of holding cash.