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Opinion

Ever-growing cash

Ever-growing cash
February 16, 2017
Ever-growing cash

This is not a local quirk. Economists at the Minneapolis Fed show that companies around the world have stepped up their savings - so much so that firms now save more than households. As part of this, corporate cash holdings have risen in many countries: Apple alone has $246bn of cash.

For American firms such as Apple, these cash holdings are due in part to one of the many oddities of the US tax system: if a company brings cash into the US it becomes liable for corporation tax, so firms prefer to hold cash overseas. This, however, doesn't explain the UK and global trends towards more corporate cash. Instead, there are five other explanations:

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