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Basel III reforms may impact superannuation fund cash strategies
The new global regulatory standards for bank capital adequacy, Basel III, may have a flown-on effect on the cash strategies of Australian superannuation funds.
While the banking reforms - developed by the Bank of International Settlements - primarily effect the capital management of global banking systems, MAP Funds Management chief investment officer Ross Endres said the reforms would definitely impact the management of MAP's cash pool and the possible returns that pure cash may earn in the future.
As a number of super funds make the return back to cash in their asset allocation, Endres said MAP would have to consider other solutions to maintain the strong performance he has seen in the asset class over the past two years.
"What is particularly pleasing for me is that we (MAP) took a strategic decision to focus on cash back in 2009 and we are seeing the results of that decision on the current returns of our fund now," he said.
"We are currently in discussions with a number of banks and other Australian deposit-taking institutions looking for the best solutions for our members."
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