Basel III liquidity rules shaking up the corporate deposit market

Corporates have huge cash reserves, and banks are on the hunt for stable sources of funding. That combination has been a shot in the arm for the sleepy corporate deposit market, and a chance for treasurers to earn better yields than they are used to. By Michael Watt

It didn't take long for product design to catch up with Basel III. The rules were only finalised in December last year, but have already resulted in a new form of deposit being marketed to corporates. It ties customers into deposits lasting a year or more, while giving them an option to withdraw their cash at 35 days’ notice – meaning the funds aren’t caught by the 30-day maturity threshold written into the first of Basel’s two liquidity measures, the liquidity coverage ratio (LCR). Regulators