September 9, 2013 - MORS Software today published the results of their annual Liquidity Risk Management survey carried out in May, June and July 2013 which highlighted the importance of intra-day liquidity risk monitoring for most banks while pointing out that many banks have not yet completed their intra-day liquidity risk projects.
The key findings of the survey:
- Intra-day liquidity risk monitoring is a priority for most banks
- Intra-day liquidity risk projects not yet completed by banks, annual survey reveals little progress since last year
- Regulatory compliance ranked as the second-most important incentive for intra-day, after business benefits
The MORS Software 2013 Liquidity Risk Management survey was conducted between 15 May and 15 July, 2013. Eighty-two banking professionals from twenty-six countries across the UK, Continental Europe, Asia, Africa, the Middle East and North America participated.
The survey reveals that intra-day liquidity risk monitoring continues to be a priority for banks, and over two-thirds of the banks surveyed monitor liquidity risk in intra-day.
The survey also showed that the majority of intra-day liquidity risk projects have not yet been completed. The advancement of the projects appears to remain at the same level as last year: only a minority of banks report having completed their intra-day liquidity risk management projects. The number of banks that have not yet determined how to proceed with development also remains at the same level as the year before. Additionally, only one-third of banks are able to monitor consolidated bank-level risk figures in intra-day, which is the standard targeted by regulators. This result is also similar to last year’s finding and shows little progress in the area.
Regulatory compliance has become the second-most important reason for achieving intra-day liquidity risk management; business benefits remain the main incentive. Efficient use of liquidity and reduction of related costs was considered the most important business benefit, the rising significance of supervisory approval and Basel III compliance reflects the approaching deadlines.
“The survey results confirm our general impression following discussions with banks,” said Mika Mustakallio, MORS Software CEO. “Many have not yet completed their intra-day liquidity management projects. Complying with the approaching regulatory reporting deadlines is still an urgent priority for banks. Being able to monitor, forecast and steer intra-day liquidity risk are the next targets.”
