In which liquidity management structures does physical cash movement occur?

In liquidity management, structures that involve physical cash movement are essential for efficiently managing a company's cash resources. The correct answer indicates that Zero Balance Accounts (ZBAs) and two-way sweep structures are the options where physical cash movement occurs.

Zero Balance Accounts are designed to maintain a zero balance throughout the day. Any excess funds in the account are automatically transferred out to a central account, while required cash is swept back in as needed. This creates a dynamic movement of cash to ensure that each account operates at an optimal balance, while surplus cash generates more returns.

Two-way sweep structures also facilitate physical cash movement between various accounts. They allow for both the transfer of funds into and out of a concentration account based on the cash balance requirements of various sub-accounts. These sweeps enable organizations to manage liquidity effectively by making sure that funds are allocated where they are most needed, thereby optimizing interest earnings or minimizing borrowing costs.

The alternatives provided, such as notional pooling and Pay on Behalf Of (POBO), are primarily focused on accounting for cash positions rather than facilitating the physical movement of cash. Notional pooling allows for the offsetting of balances but does not involve actual transfers of cash, while POBO involves centralizing payments but does not necessarily imply physical