Liquidity management
Avoiding the severe implications when lacking control over it
Q4 2009
Agenda
Your challenges, our solution The SWIFT liquidity management solution Your project More information
Liquidity management - Q4 2009
Remember the crisis in 2008
Source: [Link] at Sibos 2009, Hong Kong
Liquidity management - Q4 2009
More regulation is expected
Global
Principles for Sound Liquidity Risk Management and Supervision Basel Committee on Banking Supervision (BCBS) of the Bank for International Settlements (BIS) September 2008
EMEA
Advice on Liquidity Risk Management - Committee of European Banking Supervisors (CEBS) September 2008 Strengthening liquidity standards - Financial Services Authority (FSA) June 2009 Federal Register / Vol. 74, No. 127: Consultation on proposed guidance on funding and liquidity risk management - US regulators July 2009 Financial Regulatory Reform - Department of the Treasury June 2009
Americas
Asia Pacific
Guidelines on risk management practices - Monetary Authority of Singapore (MAS) February 2006 Review of liquidity regime - Hong Kong Monetary Authority, June 2009
Liquidity risk is now at the forefront
Operational risk Regulatory risk Credit risk
Liquidity risk
Counterparty risk Settlement risk Market risk
Liquidity management - Q4 2009
SWIFTs solutions to address risk
Operational risk Counterparty risk Settlement risk Regulatory risk Liquidity risk
Liquidity management - Q4 2009
Resilient messaging platform Message standards for STP RMA , Closed User Groups, personal digital identity Reach, single window Collateral management Matching and reporting services (FIN Copy, Accord, TSU) Connect to Market Infrastructures, reporting capabilities MT 202 COV OFAC filter plug-ins on Alliance Access Cash and securities reporting (end of day, intra day)
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Liquidity management value pyramid
Calculate forward exposure
Risk management Liquidity management
Run stress test scenarios Identify periods at risk Payment flow control Short term forecasting
(status: pending, future, booked)
Central view on cash positions
Cash management
Intra day cash reporting Cash pooling
Liquidity management - Q4 2009
SWIFTs liquidity management solution
Today SWIFT
payments
batch
Liquidity mgmt application
reports
Web site
Many disparate systems Manual process Information mainly in batch Lack of consolidated view
Single channel Structured, granular, timely data Feed liquidity / risk applications Central view on liquidity
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Liquidity management - Q4 2009
Risk mana geme Intra day nt
A complete set of reports
End of day
MT 940
Customer statement
End of day
Intra day
MT 900
Confirmation of debit Single transaction No balance Related reference Ordering institution
MT 950
Statement Multiple transactions Opening and closing balance Statement line
MT 910
Confirmation of credit Single transaction No balance Related reference Ordering institution
MT 942
Interim transaction report Multiple transactions No balance Statement line
MT
Multiple transactions Opening and closing balance Statement line
Statement
(camt.053)
Debit / Credit Notification
(camt.054)
Account Report
(camt.052)
MX
Structured and granular data in XML 100% of cash movements reported Rulebook for service delivery SLAs (optional) Store and forward / real-time data delivery
Liquidity management - Q4 2009
Risk Intra day
Risk management
Payment instructions
End of day
Payments Direct Debits Cheques Investmentbanking AM / Custody Other
Cash / liquidity manager
Liquidity risk manager
End of day & intra day reports
Accounts held by branches / subsidiaries at nostro agents
Calculate forward exposure Run stress test scenarios Identify periods at risk
Liquidity management - Q4 2009 10
Evolving SWIFTs offering
Standards
Do current standards cover your needs? Use MX versions? Common rulebook around service delivery SLAs? Receive more frequent and intra-day reports?
Messaging
Collect information from each branch or use FINInform to copy reports to head-office? More SWIFTReady application vendors? Bundle messaging services with liquidity / risk software? Mainly internal IT staff? Role for SWIFT consultancy services? Exchange expertise and best practice on swift [Link]? Facilitate dialogue on collaborative solutions?
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Software Integration services Community
Liquidity management - Q4 2009
Your project
Current situation
# payments sent: # statements / reports received: . Methods used to obtain statements / reports: a) .. b) .. c) .. Applications Cash management: . Liquidity management: . Liquidity risk management: .
Business objective
Receive intra-day account information, to perform liquidity management Put in place liquidity risk management function Provide liquidity information to customers, to enhance service and generate new revenue
Liquidity management - Q4 2009
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More info?
Your SWIFT relationship manager [Link] [Link] swiftforbanks@[Link]
Liquidity management - Q4 2009
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