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Corporate treasury teams are responding to the volatility in the external environment by increasing their cash balances and carefully mitigating risk in those investments. That's the key finding of the "2026 AFP Liquidity Survey Report" from the Association for Financial Professionals (AFP), which includes insights from 309 treasury and finance professionals across a wide range of industries.
Within this group, forty-six percent saw their company's balances of cash and other short-term investments grow from 2025 through March 2026. And although 89 percent of these respondents said expanding operating cash flows contributed to their choice to increase cash holdings, tricky economic conditions also affected the decision for many. Nearly half (49%) cited domestic political and regulatory risks, such as U.S. trade policy, as a contributing factor, while 48 percent cited geopolitical risks, 45 percent pointed to decreased capital expenditures (CapEx), and 35 percent referred to tariffs imposed on trading partners as a factor. Further considerations included weather impacts, rising energy prices prompting a more cautious approach to liquidity management, and regulatory changes around cash repatriation.
Meanwhile, only 14 percent of companies represented in the AFP's survey reduced their cash balances from 2025 to 2026. (Forty percent saw no significant change.) The reasons cited for falling cash holdings include increasing CapEx (58%), inflationary impacts (58%), decreased operating cash flows (49%), and retiring of debt (47%).
Interestingly, but perhaps not surprisingly given the uncertainty in the current economic outlook, nearly two-thirds (62%) of respondents expect to increase their cash and short-term investments over the next two quarters, while just 14 percent expect to decrease these holdings.
A Focus on Minimizing Risk
Whether or not they're increasing their short-term investments, keeping those funds secure is front and center for the AFP survey participants. Among the three-quarters who have a written investment policy for short-term holdings, 61 percent said safety is the policy's most important objective, while 34 percent identified liquidity and only 4 percent referred to yield as their top priority.
"At this time, liquidity remains stable and manageable," one respondent explained. "We continue to prioritize maintaining adequate cash balances to support operations while optimizing the use of excess liquidity. Our current focus is on cash planning and forecasting processes to improve visibility across the organization. This includes enhancing coordination between treasury and operating teams to better anticipate funding needs and manage working capital effectively."
Within the bucket of short-term investments, companies are diversifying. AFP respondents keep an average of 45 percent of their short-term holdings in bank deposits, down from 55 percent a decade ago, with 20 percent now in government or Treasury money-market mutual funds (MMFs) and 12 percent in Treasury securities, including bills, notes, and bonds.
Treasury groups are also exercising caution when selecting banking partners. The proportion of survey respondents that evaluate counterparty risk before depositing funds with a bank is now 54 percent—up 11 percentage points from last year. Nearly as many companies (48%) place counterparty limits by either banking partner or deposit, and 35 percent limit concentration risk per bank or deposit. Twenty-two percent require two credit ratings for a bank they're considering working with, and 5 percent work only with those designated systemically important financial institutions (SIFIs), globally systemic important banks (G-SIBs), or domestic systemically important banks (D-SIBs). Banking partner evaluations also consider the strength of the relationship (for 81% of respondents) and credit quality (60%).
Despite the hype, most treasury teams are not even considering putting their excess cash in stablecoins or other crypto-linked assets. Only 1 percent of all respondents to the AFP survey are currently piloting stablecoins, with 9 percent more actively evaluating the technology. And many seem to consider the new currencies to be irrelevant to their cash management in the near future. Thirty-five percent are unfamiliar with stablecoins and other tokenized monetary products, but more than half (55%) are aware of these tools but not even exploring use cases.
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