Designing the Optimal Cash Pool: The Increasing Importance of Managing Global Liquidity

In today's unpredictable economic climate, companies can optimize cash and liquidity management through strategically designed cash pooling structures. A well-designed cash pool improves capital efficiency, reduces reliance on costly borrowing, and enhances decision-making speed.

This article provides detailed guidance on how to design an optimal cash pool. It delves into the complexities and constraining factors that treasurers must navigate, including external regulations and internal considerations. It also elaborates on the different types of cash pooling and banking structures that might be considered in corporate treasury’s pursuit of its liquidity management goals.