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Liquidity Risk Management

Reduce liquidity buffers, lower funding needs and comply with regulations

Managing liquidity and its associated risk is a ‘hot topic’ in the industry, as financial institutions are investing to improve their operations and comply with new regulations.

SWIFT published a white paper on managing liquidity risk, identifying gaps in current practices and suggesting areas for banks to improve.

In follow-up, SWIFT carried out a market research, including insights from 255 treasury, liquidity and liquidity risk managers at financial institutions.

SWIFT can help

You can use SWIFT to improve your liquidity and risk management:

  1. Intra-day liquidity: SWIFT has a rich set of messages that can provide transactional and account balance information to improve intra-day visibility on funds. You can also use SWIFT to obtain a bank-wide view on your global liquidity position by receiving a copy of Nostro reports sent to your branches directly to your central treasury.
  2. Liquidity movements and concentration: SWIFT can provide traffic analysis including visibility on liquidity movements, counterparty concentration and gap analysis, as well as historical evolution. SWIFT can also provide peer comparison, benchmarking and market share analysis. You can get insights per legal entity, on group level, and compare movements versus the market. Later in 2010, SWIFT will include currency and value, allowing the monitoring of liquidity in value as well as e.g. trigger alerts if certain thresholds are crossed.
  3. Application integration: SWIFT can provide consulting services to integrate Nostro reports in your payment, cash management and treasury applications.

These services can help reduce liquidity buffers, lower funding needs and comply with regulations.

For more details please contact your Regional Account Manager or send an e-mail to swiftforbanks@swift.com.

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