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Geopolitical risks and liquidity planning

Geopolitical risks and liquidity planning

13 October 2026 Solutions
Lessons from the energy and supply chain shocks of 2026
Geopolitical shocks can affect liquidity through multiple channels, from higher energy and transport costs to changing funding conditions and working-capital requirements. Drawing on the experience of 2026, this paper explores how different forms of disruption can affect treasury decision-making and why a scenario-led approach can help organisations plan for changing liquidity needs.

The paper considers three scenarios for treasury teams:

  • Sudden disruption: how an acute shock can rapidly affect inflation expectations, short-term rates, operating costs and the value of immediately accessible liquidity.
  • Persistent pressure: how prolonged energy and supply-chain disruption can place sustained pressure on funding costs, working capital and surplus cash management.
  • From inflation shock to growth shock: how an extended disruption could evolve into weaker economic activity, changing policy rates, refinancing conditions and counterparty risks.

It also considers how liquidity pressures can evolve as events unfold, the implications for treasury strategy, and the potential role of short-term euro-denominated money market funds within a broader liquidity framework.

 

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