IIF Authors

Status: Will be live at 07/06/2015 00:00

IIF-BAFT-TCH Submission on Intraday Liquidity Reporting and Management

Monday, July 6, 2015

BAFT, IIF and TCH (collectively, "the Associations") made an industry submission on implementation challenges, outstanding issues and recommendations regarding the Basel Committee's Monitoring Tools for Intraday Liquidity Management.

The global implementation of monitoring tools for intraday liquidity management is of crucial importance to the financial services industry and the international regulatory community. The Associations believe, however, that there is a critical need for cross-border dialogue on implementation alongside standardization of data and definitions across the industry internationally, which the Associations hope can be accomplished in cooperation with the Basel Committee and national authorities.

As such, this submission outlines challenges and outstanding issues relative to historical reporting and real-time management for direct and indirect clearing in this area and offers recommendations on ways to better ensure global transparency and consistency in implementation. In this vein, suggestions on standardizing definitional terms for the monitoring of intraday liquidity are also presented for consideration in order to help foster such consistency across jurisdictions and financial institutions.

In the paper, the associations recommend (a) more consistency for data and definitions for both direct and indirect clearing reporting and management, (b) a more precise phase-in approach to implementation by the Basel Committee, (c) consideration of prioritization and materiality that should focus initially on reporting of direct clearing of the main currencies and main locations covered by global banks and a materiality threshold, and how these concepts should be extended to the reporting of indirect clearing once it is phased in, and (d) sequencing of sound practices that includes regulatory oversight with distinctions based on the quadrant approach (i.e. direct/reporting, direct/management, indirect/reporting, indirect/management).