MANAGING LIQUIDITY RISK IN INTRA-DAY

The financial crisis changed the role and the importance of liquidity risk management in banks. The crisis showed how analysis of traditional liquidity metrics at month-end, or even at end-of-day, cannot provide sufficient and up-to-date information for decision making to meet the challenges caused by rapid daily, and intra-day changes of the market conditions.

Furthermore, the new tight market conditions put pressure on liquidity risk management. The post-crisis liquidity risk management orientates towards intra-day analysis of risk indicators to facilitate business steering of liquidity and funding in an optimal manner.

Regulatory changes (Basel III, EBA, FSA) are also steering the industry in this direction. To achieve regulatory compliance, banks will need to be able to aggregate, drill-down, forecast, simulate and stress-test liquidity risk indicators in intra-day, as part of their risk reporting procedure.

 

INTRA-DAY LIQUIDITY RISK MANAGEMENT WITH MORS

The intra-day capability required for liquidity risk management is inherent in MORS, as the performance of MORS solution is based on the ability to process data in real-time. MORS offers access to up-to-date information for monitoring and assessing risks for decision making at any given point in time, and gives answers to all ad hoc questions about the bank’s liquidity position at any given time, for on-demand needs for business decisions.

Managing liquidity in intra-day with MORS makes it possible to monitor key liquidity metrics, including LCR (Liquidity Coverage Ratio), in intra-day and to stress test, simulate and forecast the up-to-date liquidity metrics at any time with various scenarios. Effective intra-day liquidity risk management with MORS enables risk mitigation and internal steering of the bank’s overall liquidity position.

MORS complies with regulatory requirements as the data can be aggregated and drilled down, and the liquidity risk indicators can be simulated and stress-tested in intra-day.


Find out more about Intra-day Liquidity Risk Management in practice with MORS Liquidity Manager.

Discover how banks are preparing for Intra-day Liquidity Risk Management in MORS Liquidity Risk Management Surveys.