While the U.S. Senate plans to considers legislation today thatwould extend unlimited coverage for certain bank accounts foranother 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 than1,300 corporate finance professionals shows that 51% say they wouldshift some balances out of bank accounts if the Transaction AccountGuarantee (TAG) program providing unlimited coverage fornon-interest-bearing accounts expires as scheduled on Dec. 31. Thecompanies that plan to move money would shift a median of 20% oftheir deposits.
|The most likely new homes for those assets are money marketfunds and Treasury or agency securities, according to the AFPsurvey. Forty-two percent of the companies say they would move someof the money into Treasury-based money market funds, 41% intoTreasury or agency securities, 36% into prime money market fundsand 20% into repos.
|See the full AFP survey here. For recent coverage,see TAG Extension Faces Opposition in the House.
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