Financial institutions discuss practical ways to improve liquidity management
The industry looks to SWIFT to help progress implementation
From Mumbai to Bucharest to London, over 150 treasury, liquidity and payments managers at financial institutions attended liquidity risk management events organised by SWIFT in partnership with PricewaterhouseCoopers and Sybase. The events all took place during the month of September 2010.
Starting with an overview of the impact of new liquidity regulations – including new “Basel III” capital requirements, the events quickly turned to sharing experiences of what banks have done thus far, and the practical solutions they need to further improve their liquidity management approach and operations.
These events are a follow-up to the industry engagement started by SWIFT on this topic earlier this year:
- SWIFT issues white paper on managing liquidity risk at banks
- Market research reveals significant gaps in managing liquidity risk by financial institutions
Many banks have improved their liquidity management, but much more remains to be done.
“Intraday management of liquidity in particular, whilst identified as a key component for a sound liquidity risk management by regulators, is in its infancy in many firms”, said Thierry López, Risk Management Services Leader, PricewaterhouseCoopers Luxembourg.
“From a systems perspective, there is a need to create a data warehouse, with suitable analytic tools for historical data modelling, improved real-time dash-boarding to enable monitoring of own and key client liquidity positions across major currencies and a potential enhancement of RTGS systems to make them more liquidity efficient,” said Kevin Brown, Head of Structuring and Market Infrastructures Global Transaction Services, The Royal Bank of Scotland.
The audience’s attention then turned to find out how SWIFT can help improve their liquidity management:
- Obtain a view on intra-day liquidity, by receiving SWIFT intra-day cash and collateral reports more frequently
- Enhance RTGS liquidity management, by using SWIFT’s RTGS service portfolio
- Build a firm-wide view on liquidity position, by using SWIFT’s FINInform copy service to monitor cash movements and liquidity positions of branches
- Improve predictive collateral position management, by using SWIFT’s new margin call standards
- Streamline clearing and settlement of off-exchange equities and trades by directing matched trades through Accord for Securities with a number of CCPs
and by using the new standards developed for the communication between the Global Clearing Members and the CCPs
- Perform liquidity and counterparty risk analysis and business intelligence, from SWIFT’s new Watch Value Analyser
- Benchmark liquidity services, assess processes and support integration projects, by using SWIFT’s Consulting Services.
For additional collateral on these products and services, please see here.
“There is a need for more standardisation and industry collaboration, and these are areas where SWIFT is well placed to assist,” explained Brown.
More such events and solution-oriented working groups will be organised by SWIFT in the coming months, to progress the industry work to namely define industry practice and improve data integration.
If you are interested in participating, let us know by e-mail at swiftforbanks@swift.com.
At Sibos 2010 in Amsterdam, liquidity risk and regulation feature as a major topic.
In particular, we invite you to attend on Tuesday 26 October:
- Use SWIFT solutions to reduce your liquidity risk (9:00-9:45 AM , SWIFT Auditorium)
- Liquidity risk management: the challenges at hand (4:00-5:00 PM, Conference room 2).