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Determined not to be caught short in the next crisis should banks cut off their funding, company treasurers in the United States, Britain and the euro zone have more than doubled their cash holdings since 2000 to $5.3 trillion.But now firms find the banks don't want their money.A side-effect of new financial regulation aimed at making banks safer by forcing them to hold more capital and low-risk assets means lenders now have to classify some large corporate depositors – traditionally more flighty than small retail customers – as high risk."If the CNAVs are abolished then what we will see is greater concentration of cash with national champion banks and that is not a good thing for systemic risk or for practical operation of liquidity management for companies," said Richard Raeburn, chairman of the European Association of Corporate Treasurers.Already major companies are getting inventive with their cash. Other treasurers are depositing money with banks in Asia and the Middle East and are considering investing their excess cash in higher yielding – and riskier – assets such as company bonds.
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