Pimco - Viewpoint: The 'Big Squeeze' Begins

Summary

- Current European Central Bank policies, along with the regulatory environment, are constricting the two primary investment vehicles available to store cash. 

- As many money market funds have maxed out the risk they can take and some regional European banks have started to charge the equivalent of negative rates on deposits, large cash investors are left to ponder how to avoid the potential loss of capital.

- We believe PIMCO's approach to balancing three key cash management trade-offs ‒ mark-to-market volatility, counterparty risk and capital erosion ‒ may provide an attractive solution for investors.