What is a Cross-Border Cash Pool?

A cash pool is a cluster of subsidiary bank accounts and a concentration account into which funds flow from the subsidiary accounts. The centralized funds can then be used for investment purposes, or to offset negative balances in subsidiary bank accounts.

If a pooling arrangement includes accounts located in more than one country, this is known as a cross-border cash pool; it is most commonly used by multinational organizations, since they operate subsidiaries in a number of countries.