To paraphrase General Douglas MacArthur: Old investment policies never die; they just fade away.

It's been nearly a decade since post-financial-crisis banking reforms attempted to end the era of "too big to fail." And it's been nearly five years since Dodd-Frank guarantees on unlimited deposit insurance expired. But according to the 2017 Liquidity Risk Survey of 130 treasury professionals, conducted by Capital Advisors Group and Strategic Treasurer, most companies' investment policies ignore emerging exposures inherent in maintaining sizable bank deposit balances.

The survey also found that corporate investment policies have been slow to adapt to the new landscape of investment alternatives that have emerged following last year's reforms to prime money market funds (MMFs). Cash managers have had good reasons to hesitate before moving too much money from bank deposits into other short-term investments. Over the past year, many found themselves caught like a deer in the headlights over the uncertain status of the new floating net asset value (NAV) money market funds that replaced the old fixed-NAV prime funds. And the Fed's slow pace of interest rate increases has minimized the pressure to pursue yield through alternative investment vehicles.

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