ICD 2023 Client Survey Shows Companies Concerned About Counterparty Risk Before Bank Failures

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Institutional Cash Distributors, LLC

Apr 26, 2023, 11:01 ET

GOLDEN, Colo., April 26, 2023 /PRNewswire/ -- Even before the banking turmoil sparked by Silicon Valley Bank's failure, 80% of corporate treasury organizations responding to ICD's 2023 Client Survey said they were concerned about bank and other counterparty concentration risk. The annual survey from ICD, an independent portal provider of short-term investments, closed in February with 116 treasury organizations responding from the Americas, UK and Europe.

"The vast majority of corporate treasury teams are risk averse and invest in money market funds to diversify their cash portfolios, maintain daily liquidity and earn a competitive yield," says Tory Hazard, Chief Executive Officer at ICD.

Current or planned investments in bank Time Deposits from the Americas were down 31% from last year, indicating a move away from single counterparty risk. Most survey respondents (93%) from all regions said they planned on increasing or maintaining investments in money market funds this year, up 12% from 2022. New clients investing through ICD Portal increased 283% in the first quarter of 2023, compared to the same period last year, and the average daily balance of those client investments grew 27 times.

"Our clients are quite sophisticated and use all the tools available to them through ICD Portal to achieve their investment objectives," Hazard says. Following the FDIC's takeover of SVB, usage of ICD's exposure analytics tool, which provides transparency into counterparties, countries, sectors and more, spiked 15 times its normal usage.

Among other highlights from ICD's 2023 Client Survey:

74% - Treasury organizations expect to maintain or increase cash balances in H1
90% - Americas respondents indicated they are investing in US Government MMFs
86% - UK/Europe respondents indicated they are investing in Short-Term LVNAV MMFs
55% - Treasury organizations are currently engaged in or are planning a tech project
23% - Treasury teams say they are implementing a treasury management system this year

Find ICD's full 2023 Client Survey report here.

About ICD

ICD is treasury's trusted, independent portal provider of money market funds and other short-term investments. We provide intuitive technology and unbiased access to over 400 investment products through ICD Portal, a model in the industry for trading, reporting and analysis. We also provide extraordinary, expert service through our Global Trade Desk. For more information about ICD, contact [email protected] or visit icdportal.com.

ICD Media Contact
Zoe Sochor
+1 646.581.3277
[email protected]

SOURCE Institutional Cash Distributors, LLC