SWIFT shows challenges of intraday liquidity reporting
24 July 2014 Brussels
Image: Shutterstock
SWIFT has released a new whitepaper on the challenges of managing intraday liquidity reporting against the backdrop of evolving regulatory requirements.
The paper, ‘Intraday Liquidity Reporting – The case for a pragmatic’, focuses on a set of quantitative monitoring tools published by the Basel Committee on Banking Supervision (BCBS) in collaboration with the Committee on Payment and Settlement Systems in April 2013.
The monitoring tools mandated by the BCBS require banks to assemble the necessary data to ensure the effective monitoring of banks’ intraday liquidity risk and the ability to meet payment and settlement obligations on a timely basis.
The BCBS wants banks to start using the monitoring tools for reporting in January 2015, with full implementation by January 2017, though implementation depends upon the regulatory mandate at the national level.
Catherine Banneuz, senior market manager for banking at SWIFT, says: “Progress needs to accelerate in order for banks to be ready for BCBS reporting.”
The requirements will be a challenge to financial institutions as the demands for data on liquidity flows, rather than balance sheets, will require significant changes to banks’ existing data models and processes.
As the reporting will need to be done at both a global and local entity level, data aggregation will require the mapping between the legal entity identifier and the bank’s related operational codes.
Wim Raymaekers, head of banking and treasury markets at SWIFT, adds: “Banks need to make a pragmatic approach to the BCBS reporting. There is a fair amount of uncertainty about the reporting requirements across jurisdictions.”
“While that is being ironed-out, banks should start preparing to be leveraging the infrastructure and data formats they already have in place to feed their central intraday liquidity transaction database.”
The paper, ‘Intraday Liquidity Reporting – The case for a pragmatic’, focuses on a set of quantitative monitoring tools published by the Basel Committee on Banking Supervision (BCBS) in collaboration with the Committee on Payment and Settlement Systems in April 2013.
The monitoring tools mandated by the BCBS require banks to assemble the necessary data to ensure the effective monitoring of banks’ intraday liquidity risk and the ability to meet payment and settlement obligations on a timely basis.
The BCBS wants banks to start using the monitoring tools for reporting in January 2015, with full implementation by January 2017, though implementation depends upon the regulatory mandate at the national level.
Catherine Banneuz, senior market manager for banking at SWIFT, says: “Progress needs to accelerate in order for banks to be ready for BCBS reporting.”
The requirements will be a challenge to financial institutions as the demands for data on liquidity flows, rather than balance sheets, will require significant changes to banks’ existing data models and processes.
As the reporting will need to be done at both a global and local entity level, data aggregation will require the mapping between the legal entity identifier and the bank’s related operational codes.
Wim Raymaekers, head of banking and treasury markets at SWIFT, adds: “Banks need to make a pragmatic approach to the BCBS reporting. There is a fair amount of uncertainty about the reporting requirements across jurisdictions.”
“While that is being ironed-out, banks should start preparing to be leveraging the infrastructure and data formats they already have in place to feed their central intraday liquidity transaction database.”
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