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Jean-Philippe Dibon and Bertrand Durnez (Société Générale) : A New World for Cash Management 



When central banks U-turned to adapt to inflationary conditions, Jean-Philippe Dibon, Head of Institutional Business Development and Bertrand Durnez, Head of Fixed-Income Portfolio Management at Société Générale Private Wealth Management, say it created opportunities in the new world of cash management for treasurers who adopted a bond “buy and watch”strategy and are taking advantage of the growth of Green Bonds.

How do you assess the current cash management landscape ? 


A new world of cash management opportunities opened when, in 2022, central banks made a U-turn on their policy to adapt to inflationary conditions. After a long period of lack of opportunity, sluggish inflation, and negative returns, the new environment presents a different landscape. European central bank pushed interest rates to levels unseen for more than 10 years to avoid an inflationary spiral. Despite a steady inflation, this aggressive tightening cycle is making its effect and inflation seems now under control.

Both the Fed and the ECB are coming close to a pause in their cycle, but history taught us that any tightening period is followed by an easy one, usually within a short space of time. In this context, the attractiveness of deposit accounts further decreases as future reinvestments are likely to be made at lower rates.

For Treasurers, corporate bonds offer an attractive alternative to deposits, enabling to lock current interest rates over various investment horizons while providing visibility and security. Historically, bond markets have performed well after rate hikes. The current period seems to pave the way for opportunities. Despite a recent tightening of credit spreads, premiums remain high, supporting the investment grade side, which is a good point for institutional investors as IG assets are the prime asset class for treasuries.  

“At SGPWM we are convinced that including ESG criteria can significantly help avoid risks in an uncertain world.” 

What opportunities do you identify in this context ? 


With the combined effect of higher risk-free rate and attractive credit spread, Investors are no longer condemned to take additional risks to capture attractive return. In this regard, IG debt is a large part of the answer. Diversification with high yield or equity exposure, if your policy allows this risk, can help optimize the return. The Green Bond market also opens new opportunities. Helped by a favorable political framework, and boosted by positive supply and demand factors, the market has become more liquid and dynamic than ever. Some 5% of total issuance in 2022 were Green Bonds. ECB included GB in its current and future asset purchase programs. Demand from institutional investors grew as Article 8 & 9 funds are developing. Finally, the market enjoyed a continuous progression of ESG ETFs purchases.  


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