2026 Perspectives for the Public Sector

Specialized sweep and cash concentration programs, which diversify counterparty exposure while providing enhanced safety and potentially superior yield compared to traditional deposits, also serve as valuable tools for risk-conscious treasurers. Key Benefits Key Considerations Bank Deposits • Country specific deposit insurance limit similar to the US FDIC • Access to overnight liquidity • Attractive yields and flexible structures • Will the account be used for operational or non-operational purposes? • No committed tenors • Short-term risk rating of bank counterparty Earnings Credit Rate (ECR) • Earn soft dollar credits to offset transactional service fees • Unlock trapped cash in jurisdictions restricting hard-dollar interest • Optimize global performance by distributing credits across global positions • Trade-off between soft-dollar credits and hard-dollar interest Time Deposits (TDs) • Competitive fixed rates over specific time frames, particularly beneficial in volatile markets • Minimal documentation and no new account requirements make onboarding straightforward • Country specific deposit insurance limit similar to the US FDIC • Accurate liquidity forecasting required, as funds are not available overnight • Tenors range from overnight to five years, helping optimize yields • Access to Sustainable Time Deposits Money Market Funds (MMFs) • Counterparty diversification • High-quality, short-term instruments offering competitive yields • Access to overnight liquidity • Automation of excess cash available daily • Access to Sustainable MMFs • Need to consider fund cut-off times • Potential impact of Federal Rule 2a-7 • On-Shore vs Off-Shore requirements Advanced Automation for Efficiency and Visibility In an era of accelerating change, the ability to view and manage cash instantaneously is a significant competitive and operational advantage for public and philanthropic sector entities. Automation is a critical tool in helping both not-for- profit and for-profit entities move to a real-time world, and better respond to evolving trade landscapes, policy shifts, and payment requirements. Automation has a major role to play in improving visibility, for instance, facilitating better-informed decision-making. Citi’s InfoPool solution collates third-party banking information and transaction reporting, allowing it to be viewed centrally in CitiDirect. More generally, for organizations managing multiple accounts across borders while navigating FX risk, automation can significantly enhance efficiency and resilience. Treasurers in the public and philanthropic sectors are increasingly considering the opportunities presented by digital assets and real-time liquidity solutions. Solutions include Citi Token Services, which uses a private blockchain to transfer liquidity between Citi branches 24/7, and Citi’s Real-Time Liquidity Sharing, which allows for temporary sharing of liquidity between accounts locally on an intraday basis. Such tools empower entities tomake immediate payments and optimize working capital globally, reducing reliance on external credit lines and enhancing agility in responding tomarket disruptions. Best practice now involves centralizing cash into a single entity header account, often automated on a daily basis, to optimize revenue. Virtual accounts provide visibility and notional segmentation within a master account, streamlining reconciliation and simplifying treasury structures without requiring multiple physical accounts. These capabilities are particularly advantageous for organizations with diverse revenue streams or multi-country operations. Leveraging solutions that offer counterparty diversification, such as specialized sweep programs, can be beneficial. Citi Perspectives for the Public Sector 15