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Corporations rethinking cash holdings

As the ABCP meltdown demonstrated, many corporations used to park cash with an eye to getting the highest possible yield, attempting to squeeze every last drop of profit from assets.

Attitudes have changed dramatically, with a survey released Tuesday by Greenwich Associates showing North American companies moving to reduce risk by shifting cash holdings to the highest-quality securities. The consulting firm also found companies are chopping their expected returns from cash holdings, a move that comes as U.S. interest rates fall and the credit crunch continues to play out.