Cash & Liquidity Management

The impact of Basel III on corporate cash investment in Asia Pacific

Published: Oct 2016
J.P. Morgan Asset Management Thought for the Month – building stronger liquidity strategies – let's solve it.

October 2016

Basel III is set to dramatically change how banks view deposits; a development that is already having an impact on corporate liquidity management. Corporate investors need to understand that going forward non-operational deposits are becoming ever more unattractive to banks and we are likely to see increasing instances of banks turning away some deposits.

In Asia, this comes at a time when corporates are holding more non-operating cash than ever before; cash holdings for Japanese companies are close to US$3trn, with corporates in China holding roughly US$1.2trn – that is a lot of cash that corporates may need to find a home for once Basel III truly begins to bite in the region.

Hence, now is really the time for treasurers to begin thinking about how their deposits will be treated moving forward and the difficult short-term investment decisions that lie ahead. For those treasurers who have not already started discussing the impact of Basel III internally and externally, it would be prudent to now begin this exercise.

To hear more about how the region’s short-term investment environment is changing and some practical steps that corporate treasurers should take, read the interview with Kheng Leong Cheah, Head of Global Liquidity Sales, Asia Pacific at J.P. Morgan Asset Management. You can also download other Liquidity Insights from our J.P. Morgan Global Liquidity website With its user-friendly navigation, you’ll find a seamless connection between liquidity investment solutions and our best thinking, which can help you meet your goals in today’s complex investing environment.

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