More than 18 months after Silicon Valley Bank’s spectacular collapse sent shockwaves through corporate America, chief financial officers remain fixated on a question that should be routine: Is our cash actually safe? According to a recent survey highlighted by CFO Dive, deposit security continues to rank as the paramount concern among treasury executives, outpacing traditional worries about interest rates, market volatility, and even cybersecurity threats.

The persistent anxiety reflects a fundamental shift in how corporate treasurers approach banking relationships. What was once a straightforward decision—park excess cash at a major institution and collect modest returns—has evolved into a complex risk management exercise requiring constant vigilance, diversification strategies, and sophisticated monitoring systems. Finance chiefs are now spending unprecedented amounts of time evaluating counterparty risk, a task that consumes resources previously allocated to strategic initiatives.

This heightened scrutiny comes despite regulatory interventions and industry assurances that the banking system has stabilized. The Federal Deposit Insurance Corporation’s standard $250,000 coverage limit, designed for individual consumers, leaves corporations with millions or billions in operating capital exposed to institutional failure. While reciprocal deposit networks and collateralized arrangements offer partial solutions, they introduce operational complexity and don’t fully eliminate counterparty risk.

The Lingering Shadow of March 2023

The March 2023 banking crisis fundamentally altered corporate treasury operations in ways that continue to reverberate through finance departments. Silicon Valley Bank’s failure, followed rapidly by Signature Bank’s collapse and Credit Suisse’s emergency rescue, demonstrated that even seemingly stable institutions could face existential threats within days. CFOs who had maintained longstanding relationships with regional banks suddenly found themselves scrambling to move billions in deposits, often facing wire transfer limits and operational bottlenecks that made rapid diversification difficult.

The velocity of these collapses proved particularly jarring. Silicon Valley Bank went from a functioning institution to receivership in less than 48 hours, leaving depositors with limited time to react. Corporate treasurers learned that traditional warning signs—credit ratings, stock prices, credit default swap spreads—provided insufficient advance notice. By the time market signals flashed red, it was often too late to execute defensive maneuvers without incurring significant operational disruption.

Regulatory Responses Fail to Fully Reassure

Federal regulators moved quickly to contain the crisis, with the FDIC, Federal Reserve, and Treasury Department jointly announcing that all depositors at Silicon Valley Bank and Signature Bank would be made whole, regardless of insurance limits. This extraordinary intervention prevented immediate contagion but created moral hazard concerns and left CFOs uncertain about whether similar protection would be extended in future crises. The implicit guarantee for systemically important institutions remains just that—implicit—offering little comfort to risk-averse treasury executives.

Subsequent regulatory proposals have addressed some vulnerabilities but introduced new complexities. Enhanced capital requirements for regional banks, stricter liquidity standards, and more frequent stress testing aim to prevent future failures. However, these measures also increase compliance costs that banks may pass to corporate customers through reduced deposit rates or higher fees. CFOs must now weigh the theoretical safety benefits of stricter regulation against the practical costs of banking relationships.

Diversification Strategies Create New Headaches

In response to deposit safety concerns, corporate treasurers have dramatically expanded the number of banking relationships they maintain. Where a mid-sized company might once have worked with two or three core banks, many now spread deposits across five, ten, or even more institutions. This diversification reduces concentration risk but multiplies operational complexity. Each banking relationship requires separate account management, reconciliation processes, fraud monitoring, and regulatory compliance.

The administrative burden extends beyond routine operations. Treasury teams must continuously monitor each institution’s financial health, tracking quarterly earnings, regulatory filings, and market indicators. This surveillance function, essentially performing credit analysis on their own banks, represents a significant shift in resource allocation. Smaller companies without dedicated treasury departments find themselves particularly challenged, often lacking the expertise to effectively evaluate banking counterparty risk.

Money Market Funds and Alternatives Gain Ground

Faced with deposit uncertainty, many CFOs have shifted significant portions of their cash holdings into money market funds, which offer diversification across multiple underlying investments and daily liquidity. Assets in institutional money market funds have surged as corporate treasurers seek alternatives to traditional bank deposits. These funds invest in short-term instruments like Treasury bills, commercial paper, and certificates of deposit, spreading risk across numerous counterparties.

However, money market funds introduce their own considerations. While they offer diversification benefits, they’re not FDIC-insured and can, in extreme market stress, “break the buck”—falling below their stable $1 net asset value. The 2008 financial crisis saw the Reserve Primary Fund break the buck after Lehman Brothers’ collapse, triggering a broader run on money market funds that required government intervention. CFOs must weigh these historical precedents against current deposit safety concerns.

Technology Platforms Promise Enhanced Monitoring

Financial technology companies have identified deposit safety anxiety as a market opportunity, developing platforms that help treasurers monitor banking relationships and optimize cash deployment. These systems aggregate real-time data on bank financial health, automate deposit sweeps to maintain FDIC coverage limits, and provide alerts when counterparty risk metrics deteriorate. The technology enables more sophisticated treasury management but requires integration with existing financial systems and represents another cost center.

Some platforms employ artificial intelligence to analyze vast amounts of banking data, identifying potential warning signs that human analysts might miss. Machine learning algorithms can detect subtle patterns in deposit flows, loan quality metrics, and market indicators that historically preceded bank failures. While promising, these tools remain relatively new, and their effectiveness in predicting future crises remains untested in real-world conditions.

Regional Banks Face Existential Questions

The deposit safety obsession among CFOs poses existential challenges for regional and community banks that have historically served as primary banking partners for mid-sized companies. Corporate treasurers increasingly favor larger institutions perceived as “too big to fail,” concentrating deposits at a handful of money-center banks. This flight to safety threatens the business models of smaller institutions, potentially reducing competition and innovation in commercial banking.

Regional banks argue they offer superior service, local market knowledge, and relationship-driven banking that large institutions cannot match. However, these advantages matter little if CFOs perceive unacceptable counterparty risk. Some regional banks have responded by emphasizing their strong capital positions, conservative lending practices, and diversified deposit bases. Others have sought to differentiate through specialized services or industry expertise that justifies the perceived additional risk.

The Cost of Constant Vigilance

The resources devoted to deposit safety monitoring represent a hidden cost of the post-2023 banking environment. Treasury departments have expanded headcount, invested in monitoring technology, and allocated senior management time to banking relationship oversight. These expenditures don’t appear on income statements as discrete line items but nonetheless divert resources from value-creating activities. CFOs must justify these investments to boards and CEOs who may not fully appreciate the nuances of counterparty risk management.

Opportunity costs extend beyond direct expenses. Time spent evaluating banking relationships and monitoring deposit safety is time not spent on strategic initiatives like capital allocation, M&A analysis, or business transformation. The cognitive burden of constant vigilance also takes a toll, with treasury executives reporting increased stress levels and difficulty maintaining work-life balance. What should be a routine aspect of treasury management has become a source of ongoing anxiety.

Industry Calls for Structural Solutions

Corporate treasury associations and industry groups have advocated for structural reforms to address deposit safety concerns more comprehensively. Proposals include expanding FDIC coverage limits for business accounts, creating a separate insurance system for corporate deposits, or establishing a government-backed facility specifically for operational cash. Each approach carries trade-offs between safety, moral hazard, and cost.

Some experts argue that the current system’s complexity serves a purpose, forcing companies to actively manage counterparty risk rather than blindly relying on government guarantees. This perspective holds that deposit safety concerns, while burdensome, encourage more sophisticated treasury management and better capital allocation. Critics counter that forcing companies to perform bank credit analysis duplicates regulatory oversight and diverts resources from core business activities.

Looking Ahead: A New Normal for Corporate Treasury

Two years removed from the acute crisis, it appears increasingly likely that heightened deposit safety concerns represent a permanent shift rather than a temporary overreaction. CFOs who experienced the March 2023 turmoil firsthand are unlikely to return to the more relaxed banking relationships that characterized the pre-crisis era. Younger treasury professionals entering the field are being trained in an environment where banking counterparty risk receives the same scrutiny as credit risk, market risk, and operational risk.

This evolution may ultimately prove beneficial, forcing more rigorous risk management and reducing dangerous concentrations. However, the transition period remains challenging, with CFOs navigating unprecedented complexity while maintaining the liquidity and operational efficiency their businesses require. As one survey respondent noted, the question is no longer whether to worry about deposit safety, but rather how much worry is appropriate and what level of resources should be devoted to managing a risk that, while low-probability, carries potentially catastrophic consequences. For corporate America’s finance chiefs, restful nights remain elusive as they grapple with a fundamental question that refuses to fade: Is our money really safe?